Selecting Your Employer

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

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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.

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Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

C H A P T E R 1

Employment Realities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1The 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.

C H A P T E R 2

The Employer: General Information . . . . . . . . . . . . . . . . . . . . . 15Who 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.

C H A P T E R 3

The Employer: Financial Condition . . . . . . . . . . . . . . . . . . . . . 37Seeking Information, 38. Profits and Losses, 40.

Balance Sheet, 44. Cash Flow, 47. Business Plans, Private PlacementMemorandums, and Budgets, 48. Financial Analysis, 50.

Taking Inventory: Key Questions to Ask, 52.

C H A P T E R 4

Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Most 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.

v

C H A P T E R 5

Industry and Company Position . . . . . . . . . . . . . . . . . . . . . . . . 65Industry and Employment, 66. Industry Effect

During Employment Process, 67. Trends and Market Share, 69. Taking Inventory: Key Questions to Ask, 74.

C H A P T E R 6

Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75It 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.

C H A P T E R 7

The Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Job 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.

C H A P T E R 8

Why Is This Job Open? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107Change of Duties, 108. New Jobs, 109. Jobs Open Because of Transferor Promotion, 112. Jobs Open Because of Discharge, 114. Jobs Open

Because of Voluntary Termination, 118. Problem of the EmbitteredBypassed Employee, 120. Taking Inventory: Key Questions to Ask, 122.

C H A P T E R 9

Cultural Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123Discovering the Culture, 125. Normal Cultural Environment, 125.

Extreme Factors, 126. Taking Inventory: Key Questions to Ask, 134.

C H A P T E R 1 0

The Employment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135Interviewing: 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.

vi CONTENTS

C H A P T E R 1 1

Personal Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149Nothing 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.

C H A P T E R 1 2

Relocation: Considering Community Factors. . . . . . . . . . . . . . 161Sources of Information, 163. Economic Factors, 164.

Quality of Life Issues, 169. Local Status of Employer, 173. Taking Inventory: Key Questions to Ask, 174.

C H A P T E R 1 3

Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175Compensation Philosophy, 176. Salary Structure, 178. What Will He

or She Cost?—The Employer’s Rationale, 181. Elements ofCompensation, 183. Taking Inventory: Key Questions to Ask, 190.

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

CONTENTS vii


Introduction

Selecting and evaluating jobs and employers is a task for whichfew are well prepared. While you can never expect to enjoy completecertainty surrounding your career decisions, it is possible to greatlyimprove the odds for favorable results. Improving the odds involvesevaluating a potential job, employer, and community in a systematicand comprehensive manner. The evaluation process is essentially asearch for desirable characteristics, not simply an effort to avoidcareer missteps and to identify problems. There are both great jobsand employers as well as terrible ones, but most are somewhere be-tween the two extremes. Rarely, if ever, are employers and jobs per-fect, so the evaluation requires judgment to weigh both positive andnegative factors in order to make sound decisions on both a short-and long-term basis.

All employment decisions are made in the context of comparingone’s present condition or predicament with the alternatives. If youare currently employed, you should first evaluate your present em-ployer and job as extensively as you would research new ones. Nomatter how unhappy you are in your present situation, you undoubt-edly could stumble into an even worse job. If, on the other hand, youare satisfied with your current job, any job change should presentitself as an improvement. Furthermore, systematic evaluation is par-ticularly helpful when you are in the fortunate situation of choosingbetween several job offers. If you are unemployed, on the otherhand, the question then becomes, “How long can you financiallyand emotionally hold out until the right job is offered to you?” Youmay find it necessary to take a less desirable job to tide you overuntil a better one is found.

A RECIPROCAL RELATIONSHIP

In order to properly evaluate a new employer and job, both the em-ployee and employer must recognize that it is to everyone’s advantage

ix

for information to be shared freely and openly. Both the employerand the applicant are responsible for determining if the job is suitablefor the candidate. Evaluation of an employer need not be based solelyon promotional material provided by the employer, or on intuition orhow charming and persuasive the interviewers were (who may begone tomorrow). In most cases, applicants make employment deci-sions based upon word-of-mouth information and on how well theylike those they met during the interview process. This is also true fromthe employer’s perspective—that they place emphasis on how wellthey like the applicant in addition to the applicant’s ability to performthe job. Neither one, taken alone, gives a full accurate picture of aproper match between employer and employee.

Rather, information should be gathered from as many sources aspossible, by asking key questions that enhance the evaluation andthe eventual decision. Unlike employers—who feel free to ask anyquestions they wish, conduct intrusive psychometric tests, and per-form highly personal investigations—potential employees often feelat a disadvantage. Interviewers may be offended by probing ques-tions and certainly would never tolerate being subjected to the sametests and investigations they use to screen applicants. Therefore,applicants must gather the information they need, but in so doingtheir quest requires resourcefulness and discretion. One of the mainpurposes of this book is to assist an applicant in the search for criti-cal information useful in decision making.

During the period of mutual courtship and interviewing for a posi-tion, the candidate should have his own program to tactfully acquireall the necessary information. To do so, the candidate must know whatthe important questions are, what information to request, and the sig-nificance of observations. Unfortunately, changing jobs occurs in anenvironment of uncertainty. It is often a time of personal stress becauseof financial pressure, family conflicts, the importance of making thebest decision and awareness that a bad decision could have disastrousconsequences. The decision is made more difficult because most appli-cants have limited experience in changing jobs and evaluating employ-ers. Frequent job changes or lengthy job searches that provideexperience are usually not looked upon favorably by employers.

WHY THIS BOOK?

This book will provide the tools to evaluate a present or new job,employer, and community. Selecting the best available employer and

x INTRODUCTION

job for which you are qualified should be the objective of your careermoves. Every job held is a step in your career ladder and you wantwell-planned steps to advance your career, not missteps. SelectingYour Employer is written with the conviction that an informed indi-vidual will make better decisions and recognition of the fact that ajob may be perfect for one person and totally wrong for another.Developing a plan of action, including identification of critical fac-tors, will improve the probability of making the right decisions andhelp prevent foolish ones. To go through the time-consuming andoften expensive process of changing jobs, only to discover after start-ing that acceptance was a mistake, is a personal tragedy. To enjoy anew job consistent with the preemployment evaluation that indi-cated it was the right job is a success story.

The primary purpose of this book is to assist in selecting the bestpossible job and employer. Extensive knowledge of the job andemployer prior to starting will prove to be of great value once on thejob. To know the job environment and what is expected will surelybenefit performance and help make favorable those important firstimpressions. Advance knowledge will speed your assimilation into anew job and avoid costly mistakes.

The book is primarily for those seeking positions in private busi-nesses or nonprofit institutions and for anyone offering career adviceto these people. Its greatest value will be to evaluate positions com-monly described as executive, administrative, and professional, fromentry-level up to but not including chief executive officer, although itcertainly can enlighten anyone.

The chapters of the book are organized by subject enabling areader to both read the book in its entirety for an overview and haveit as a continuing reference as subjects requiring special attentionemerge during the employment process. At the end of each chapteris a series of question for you to use in planning your evaluation pro-gram and as a quick reference to identify subjects for which you needmore data. Few if any engaged in an evaluation will have the time oropportunity to ask all the questions posed in this book but the moreanswered, the better will be the odds for wise decisions.

With the information gained and a little luck and as the ancientGreeks said, “may the Gods be with you” your career should progress.

INTRODUCTION xi


CHAPTER 1

Employment Realities

Assume your present and next employer will not be your last.

The increasing instability of the employment environment is suchthat it is unrealistic for anyone to assume that his present employer,or his next for that matter, will be his last. Regardless of periodicfluctuations in the economy, it is also reasonable to assume thatsomewhere there is another employer with an equal or better job foryou than the one you now hold. Our economic system has createdgreat wealth for some—as well as unprecedented numbers of jobsand employment opportunities—but the statistical totals tend tomask 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 livesare more easily identified. In other words, the uncertainty of jobtenure and the existence of other opportunities places the responsi-bility upon each individual to pursue his or her own self-interest. Acritical aspect of looking after oneself is the ability to accurately eval-uate your present employer as well as future ones.

THE FACE OF INSTABILITY

Most causes of job instability are not new and have existed sincethe dawn of the industrial age. Mergers and acquisitions, technolog-ical change, downsizing, reorganizations, financial success and fail-ures, government regulations and policies, economic cycles, and evenretirements and deaths contribute to the instability. Fanciful nostal-gic views that in the “good old days” employees were secure ortreated better are not supported by the facts. What is new—and issupported by statistical evidence—is that turnover rates are increas-ing and the average job tenure is declining. Furthermore, currenttrends and practices are expected to continue and accelerate. What

1

we do know is that in a free market economy, for-profit and non-profit organizations grow and contract as their financial conditionimproves or declines, with many factors influencing job stability. Nomatter what the cause of turnover, the only one of importance is theone that directly affects you!

So, how is job stability or instability created? Every organizationhas a management team consisting of individuals with diverse abili-ties who are responsible for the success of the enterprise. The combi-nation of their talents or lack thereof, coupled with factors beyondtheir control (sometimes described as “luck”), determines the fate ofthe employees. The ability to manage and adapt to continually chang-ing conditions is undoubtedly a primary factor in creating stability,instability, or growth. It is not the organizations but the people whomake the decisions within those organizations that eventually affectthe employees. It is important to keep in mind that these decision-makers possess all the usual strengths and weaknesses of people inpower and are largely motivated by self-interest.

What does all of this mean? Constant change and the unexpectedare the only conditions certain to continue in the employment envi-ronment. Ask anyone late in his or her career if their careers turned outas envisioned when they were young. It is doubtful if any career pathscould be foretold; upon reflection, most people will marvel at the roleof unexpected or chance events. Surely, it will be the same today forthose who are just starting out in their careers. Recognizing that insta-bility, change, and chance events are bound to occur—coupled with arealization that nothing lasts forever—enables an individual to berealistic, to guard against adversity, and to take advantage of oppor-tunities. An awareness of uncertainty helps people avoid the securitytrap, 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 anindividual has little control, but many of these can be anticipated andtheir effects can be mitigated or even exploited.

A NEW AGE OF BUSINESS

The attitudes and thinking of business owners and managementhave undergone marked changes in the last half-century. Our semi-free market economic system that evolved unfettered by only onedogmatic economic theory continues to create more wealth and

2 SELECTING YOUR EMPLOYER

opportunities than any other economic system in the world. Theeconomy is an evolving mixture of relatively free markets, govern-ment regulations and controversial theories argued by and amongeconomists. Even past and the current Chairmen of The FederalReserve Bank admit they do not fully understand the economy.However, it is clear the motivating forces of self-interest and greedare recognized as necessary components for driving the system.Building upon past success of the free market, we now have the ageof ubiquitous entrepreneurs, elevating business creation and techno-logical change to unprecedented levels. Less than fifty years ago, asindividuals completed their education, they thought in terms of find-ing a job and staying with the employer for the duration of theircareers. Employers assumed they would be in business indefinitelyand selected applicants they believed would remain permanently.There was an unwritten understanding that employees would con-tribute their best efforts, remain with and be loyal to the employer inexchange for training, promotions, compensation increases, and jobsecurity. Employees did not expect to continue indefinitely in the jobfor which they were hired but rather planned to have a long careerwith the employer. Few do so today.

Today, frequent employer changes are common and anticipated.Back then, rarely did college graduates think in terms of startingtheir own business. There were no courses on how to write businessplans and become an entrepreneur. Now such courses are offered inevery undergraduate and graduate business school curriculum. Busi-ness schools extol the virtues of entrepreneurs and start-ups compa-nies that out-maneuver lumbering corporations and produce a fewbillionaires in the process. Graduates seek employment to accumu-late money and polish their skills in preparation for starting theirown businesses. The advent and proliferation of venture capitalfunds have made possible the dreams of aspiring entrepreneurs. Themajority of those who start a business fail, and many who do fail tryagain. There is little stigma today in failure.

So, we see how the cycle continues. An employer is affected whenthe budding entrepreneur quits to start a business. Furthermore, theemployees of a failed enterprise are forced to seek other employ-ment. If the business is a success, more employees are hired, each cre-ating a vacancy upon departure from their current employer.Perhaps, even greater instability is caused by technological innova-tions both in the form of new inventions and new business tech-niques that obsolete competitors and people altogether.

EMPLOYMENT REALITIES 3

LOYALTY’S DECLINE

This endless process of change, job creation, redundant employ-ees, and instability contributes to the general decline in employee-employer loyalty over the long term. Loyalty in this context is anemployee’s dedication to the best interests of an employer, coupledwith a determination to remain with the employer and not seek oraccept a job with another employer. Employer loyalty requires treat-ment that employees perceive to be fair, satisfying jobs and creatinga sense of security with a policy of retaining employees during adver-sity. Loyalty cannot be expected to survive for any length of timeunless it is reciprocal. Loyalty certainly exists to varying degreesfrom 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 loyaltymay be nurtured and can exist for the short term, but it is unrealis-tic 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 viceversa is reflected in the employee turnover rates discussed earlier. Fewemployees in the early stages of their careers expect or even wish toremain with an employer until retirement, let alone in the same posi-tion. Many employers select new employees whom they believe canquickly become productive and be either promoted or terminated.Employers are driven by the need for profits and every employee is anexpense, regardless of his or her position within the organization.

Labor costs are a major variable expense requiring the vigilance ofmanagement. It is the responsibility of managers, from the first-levelsupervisor to the president, to control and reduce expenses, to in-crease profits, and to financially strengthen the institution. The phi-losophy of the need to protect and perpetuate the organization as awhole, regardless of the impact on individual employees, providesjustification for most distasteful actions. Every employee should real-ize they are expendible and are only employed because they areneeded for the organization to function as a whole, or because theyproduce measurable income in excess of their expense. Those seekingjob security must realize that this notion is only a delightful illusion.

Loyalty has declined to the point where it is often considered afoolish attitude. Owners and managers have pursued their own self-interest without regard to their employees in highly publicized activi-ties to the extent that nearly all employers tend to be viewed as


similarly disloyal, although they are definitely not. Leveraged buy-outs, breakups and liquidations, excessive executive compensation,divestitures, relocation, and similar events that may benefit the organ-ization as a whole (or those personally in control) are often disastrousfor employees. The creation of larger and larger corporations byacquisitions results in management far removed from the employeeswho are affected by their decisions. It is always easier for executivesto eliminate jobs of faceless employees whom they have never known.

The Fallout

The disenchantment of employees with large corporations is in-creasingly evident. The business press is a daily reminder of indis-cretions, failures, and management follies so blatant and numerousthat every employee should be wary. Employees realizing they arewithout long-term security cannot justify having loyalty and wiselylook after themselves. Attempts by corporations to instill loyaltythrough ambitious training programs designed to create team spiritand stock options for the chosen few or other “golden handcuffs”rarely have long-term effects. The incentive for employees to remainuntil retirement age and receive a pension has largely been elimi-nated through the proliferation of 401K plans primarily designed tocontrol employer costs. One consequence of an employer’s lack ofloyalty is a readiness of employees to be receptive to unsolicited joboffers or to seek out and accept jobs with other employers. Facilitat-ing employee mobility is a huge industry in and of itself—composedof employment agencies, management search firms, out-placementfirms, government agencies, Internet services, and numerous othersengaged in assisting employees seeking other employment, havingemployees believe their jobs are constantly at risk.

The Good News

Regardless of the general employment environment, there arethousands of fine employers who have earned and deserve theiremployees’ loyalty. Unfortunately, forces and events beyond the con-trol of even well-managed companies and compassionate executivesdo occur, resulting in the termination of dedicated employees. It isyour responsibility and in your self-interest to locate an employerwho will reciprocate your loyalty and who has a low probability ofbeing adversely affected by uncontrollable events. In this age of


mega-mergers, the size of the employer is no protection against jobloss; the most you can hope for is a low probability of major changesand that you will be a lucky survivor. As an example, in the Exxon-Mobil merger of 1999, most employees retained their jobs althoughthousands of employees at all levels were dismissed. Unfortunatelyyou can never assume you are an exception immune from the vicis-situdes of the employment scene. Regardless of how comfortable andsecure your present employment may appear, conditions may changeforcing you to actively evaluate your alternatives and how theywould be pursued before an urgent need exists.

ALTERNATIVES AND CHANGING JOBS

Right now, you are in the best position to evaluate your present sit-uation, and the alternatives to it, in a systematic and rational manner.This may be difficult, however, because it also involves looking at one’sself objectively, which is always a challenge. Further complicating thetask is how to weigh multiple factors affecting your career when someare highly desirable, others repulsive, and others unknown or incom-prehensible. If you are employed, start with a systematic evaluation ofyour current employer, job, and overall situation. You will most likelyhave access to more information about your present employer thanany future employer prior to employment. If unemployed, evaluateyour last employer. You need practice to evaluate future employers andstudy of your present situation provides this. It enables you to objec-tively compare alternative job situations. Similar to job interviewing inwhich you become more skilled and relaxed with each interview, youbecome more perceptive and competent in evaluating employers asyou gain experience. Throughout your career you will frequently havethe need to evaluate your alternatives, and during the employmentprocess there is an almost continuous requirement.

It is helpful to recognize the basic elements involved in the em-ployment system and what occurs when changing employers. Theseelements are summarized as follows:

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


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

An Initiating Event

The process of selecting a new job and employer may be initiatedby 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 opportu-nity may set in motion the process that leads to new employment.Once the initiating event occurs, the need for evaluation of alterna-tives commences. You will be comparing your present circumstanceswith other possible opportunities, some of which will be very realand will require immediate decisions, as well as others which repre-sent only vague hopes. Once the initiating event occurs, thoughts onwhat you want in your career and your responsibilities and obliga-tions take on a new urgency.

Resume Preparation

As we all know, a written description of an applicant will eventu-ally be required during the job search so prepare it early. This usuallycomes in the form of a carefully prepared resume, but it could be anemployer’s application form. Some employers require both becausethey see too many resumes that are flamboyant sales documents,which fail to present a complete or accurate picture. A valuable by-product of resume writing is that it forces one to consider his or herrecord in detail and to recognize accomplishments and deficiencies.

Resumes are commonly submitted with cover letters written togain the attention of the prospective employer. The primary purposeof a cover letter is to create sufficient interest in the applicant to war-rant further consideration. Employers of any size receive hundreds ofresumes and an applicant must find a way to differentiate himselffrom the others. Knowledge of the employer is essential to compos-ing an effective cover letter because the best letters contain referencesto specific attributes of the employer as an indication as to why theapplicant is interested in the position and qualified for it. The moreinformation the writer has about the employer, the greater is theprobability an impressive sincere letter can be written. Of course,


there is also the possibility that negative information about theemployer will emerge and the decision will be made not to send acover 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 facedwith the big questions of “who” and “how.” Much has been publishedon how to conduct job searches, and there are individuals and organ-izations available to provide advice. Be aware, however, that there areextreme variations in the advice offered, forcing a job seeker to decidewhat is sensible and will probably work for him or her.

Applicants seldom possess unlimited resources of money and timeand should begin early to evaluate and select the most attractive em-ployers and screen out the undesirable. In some cases, the need forincome may be so severe that a highly selective job search is imprac-tical. The pressure for immediate employment may also affect one’sjudgment and the evaluation will be less than objective, glossing overor minimizing serious problems that might be uncovered about thepotential employer. This possibility should be recognized andguarded against by every financially pressed job seeker. If you mustaccept a less than desirable job, start planning your next job moveimmediately. You should also realize that most employers are per-ceptive and avoid hiring applicants below their skill and experiencelevel, having learned those they do employ are unlikely to remain.

Interviewing

A crucial phase in the employment process is interviewing. For theapplicant, interviewing is the opportunity to make a favorable im-pression, to become informed in depth about the job and the em-ployer, and hopefully to be offered a job. Interviewing for theemployer consists of an exchange of information resulting in impres-sions, opinions, and a decision to withhold or make an offer ofemployment. During an interview, the prospective employee canconfirm information previously acquired and secure answers to re-maining questions. Equally important, it is an occasion to observefirst hand the people, facilities, and the general work environment.These direct observations provide reliable information that can beacquired no other way. As a general rule, the more important the job


is to an employer, the lengthier the interview will be. Generally, moreinterviewers will be involved and a greater number of interviews willbe conducted. Repeat interviews are always a good sign to an appli-cant that he is in contention for the job.

Negotiations

Should an employer decide to employ an applicant, a job offer stat-ing compensation, benefits, and the nature of the job is presented. Itmay or may not be acceptable in the applicant’s eyes. If unacceptable,negotiations to resolve differences may commence. At this stage, theapplicant should know how much he or she wants the job and shouldhave a good sense of how much the employer wants the applicant.Usually, by the time an employer makes an actual offer, there has beena framework of information exchanged so that the offer is in an antic-ipated salary range. The employer has probably disclosed its com-pensation policies and is aware of the applicant’s compensationhistory and requirements.

Career Transition

Accepting and starting a new job constitutes a career move that isnot just another line on your resume. Regardless of whether the jobis only temporary or a step of major importance, it is a career moveand an experience that will always become part of an individual’srecord. Penalties for career mistakes can be severe. Early perform-ance on the job, including assimilation into an employer’s organiza-tion, may determine whether the job is a step up or a step down—asuccess or a failure. The better informed the employee, the better arehis chances for success.

Having an awareness of the steps of the employment process helpsyou assess your present stage and determine what has yet to happenbefore you start a new job. A common mistake is to assume one isfurther along in the process than is actually the case, and to under-estimate the magnitude of the effort and time necessary to find newemployment. Of course there are enormous variations, depending oneconomic conditions, your abilities, and the continuous role ofchance or luck in events. By their very nature, chance events cannotbe counted on, but you can be certain they will occur. No one everlooks back upon a career without marveling at the role of chanceevents, observing how it all could have been very different. During a


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

EVALUATION TECHNIQUES

To evaluate an employer and job in a systematic and thoroughmanner, you should evaluate each element individually. Look at theemployer, the job, the management, and so forth, each separately. Itis possible to find a wonderful employer who is offering a job youdetest or a great job with an unappealing employer. You will find itextremely difficult to have any enthusiasm without feeling positiveabout both the job and employer.

The elements described in the remaining chapters of this book areinterrelated, but each should be considered separately. In doing so, ittends to reduce the common problem of a “halo effect” in whichenthusiasm or distaste for one aspect may influence your view of allothers. As an example, you may believe living in Denver, close to themountains, would be wonderful and therefore overlook your newboss’s unbearable personality. Separate study of the elements, one byone, is a more manageable approach than attempting to look at theentire job before having all the information available. Keep in mind,however, that no one should spend the time to study each elementuntil he has decided that the job appears to be one he would acceptif offered.

A systematic study of each element also reduces the chance of over-looking important facts. Eventually, you will have to look at the situ-ation as a whole and weigh the desirable and undesirable features tomake a decision. You will never have all the information you mightwant, 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 tocompare. The standard in this case consists of what you believewould be the ideal employer and job for you. It is to your advantageto carefully consider your description of the ideal before you com-mence the employment process. The ideal for you depends on manyfactors, including the present stage of your career, your interests andcapabilities, family requirements, and a host of other factors peculiar


to you alone. In constructing your ideal, realism should always beparamount. A description of the ideal employer and job that is anunobtainable fantasy would be of no value and actually detrimentalto the entire process.

For most, the ideal job would be similar to the following:

• The employer is financially strong and has an outstanding rep-utation;

• 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 appli-cable for a person looking for a stable situation, relatively free ofrisk. For most people, a more detailed ideal would be advisable, rec-ognizing specific needs and personal preferences. While it is improb-able that you will find the 100-percent perfect job, having this idealconcept in advance is recommended. Constructing your ideal enablesyou to identify the elements of importance and those that are sec-ondary or insignificant. It is worth your time to reduce your ideal towriting, but don’t hesitate to modify your description as new infor-mation emerges or as actual conditions force compromises. You donot want to be burdened with impossible standards or objectives.

Taking the Long View

The primary emphasis in your evaluations will be on your presentemployer and job and the next ones you are studying. However, youshould also be looking to the probable employers and jobs thereafter.Another advantage to early identification of acceptable and undesir-able employers is that it enables an applicant to better use resources topursue only those suitable. Precisely who they will be is probably un-known, but you may have some insight into your logical progression,


either with your present employer or with one you hope to eventuallyjoin. The big question regarding current or future jobs is “Will theybe a step forward to finding other jobs consistent with your overallcareer objectives?” If the answer to this is “yes,” you are on the rightpath. If you are currently in a financial condition where you mustaccept whatever job is available, then it is all the more important thatyou be thinking of your next job and follow the steps recommendedin the following chapters.


TAKING INVENTORY: KEY QUESTIONS TO ASK

❐ How confident are you that your present or next job will beyour last?

❐ What is your level of loyalty toward your employer and histoward 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?



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 thespecifics of the position alone or, for that matter, a general “feeling”that they get during the interview process. In doing so, they overlooksome of the most critical information for making a good career deci-sion: a full profile of the potential employer.

You will need considerable information to properly evaluate anemployer prior to accepting a job offer. This information can be cat-egorized into financial and nonfinancial components, and are sepa-rated for your convenience into this chapter and the next. The nextchapter is devoted exclusively to financial matters and this chapterto nonfinancial topics, but it should be kept in mind that the two areinterrelated. Both categories are important and while one may be ofmore interest to you, neither should be neglected. The subjects cov-ered in each category are not presented in order of importancebecause this is highly subjective. By identifying and prioritizing yourown issues of importance, you are able to review the informationyou already possess, decide what additional information is needed,and plan how the missing information will be acquired. This proce-dure will help you answer the question: “Do I have enough infor-mation to accept or reject a job offer?” There are critical aspects ofthe employer for you to explore and understand before you cananswer 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

• 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.

WHO IS THE EMPLOYER?

A question you should ask early on is, “Who and what is theemployer?” The answer to this is fundamental, not only for you tounderstand the employer but also to gather information. Theemployer is essentially the person or institution responsible for yourcompensation—the entity that can hire and fire you. Your actual pay-check may not come from the employer as is the case with some con-fidential payrolls (or through the use of subcontracted payrollservices), but the employer is the one responsible for providing thefunds. Employers come in many legal forms and may not always bewhat you expect. Some employers are better known for the tradenames of their products than their legal name and others are DBAs(doing business as) in which the owners have decided to conduct busi-ness under another name. The employer may be a partnership, anindividual (as in the case of a sole proprietorship), and more com-monly a corporation. Corporations fall into three general categories:public, private, and nonprofit. Public corporations’ shares are usuallytraded on one of the stock exchanges, and these corporations arerequired to disclose significant information about their activities, allof which is readily available to the public. Private corporations haveshares that are not publicly traded, and their information is oftenclosely guarded and difficult to acquire. Nonprofit corporations donot pay federal income taxes, and profits are dedicated to causesdefined by law as socially desirable, usually charitable, or educa-tional. Those in charge of the nonprofits can and often do benefithandsomely from their association through direct compensation,perquisites, and insider business arrangements. The majority of hos-pitals are nonprofit corporations. Information on nonprofit corpora-tions has to be filed with government agencies and made available tothe public.

Corporations are permitted to own all or parts of other corpora-tion’s shares, making possible tiers of corporations in which thereare numerous layers of corporations between the bottom subsidiaryand the parent company. Often it is difficult to find reliable infor-


mation on a subsidiary of a subsidiary. Even more troublesome isthe task of locating information on “divisions” or “groups.” Theseare terms commonly used to describe business units owned by acorporation but not structured as subsidiaries or legal entities. Divi-sions are only similar in that they are not legal entities, but theircharacteristics vary widely and particularly in the level of autonomygranted by the parent. The degree of autonomy should be a matterof extreme concern for any management applicants. Groups areusually formed for convenience in management and consist of sev-eral divisions and/or subsidiaries overseen by a group management.If you are considering a job with a subsidiary or division, you defi-nitely should review information on the parent If the parent is apublic company you may find revealing formation on business seg-ments required in their annual reports and SEC filings. However, inmost cases you will only be able to obtain the information you needduring your interviews.

Other types of employers are joint ventures, usually in corporateor partnership form, in which there are only a small number of own-ers who have pooled capital or contributed resources to create theventure. Joint ventures are often of limited duration, created toaccomplish a specific project, and many eventually experience dis-putes among the owners. Another variety of a joint venture is a pri-vate corporation with few owners, established to accomplish aspecific program where the shareholders believe their combinedrespective strengths and contributions will be more successful thangoing it alone. Critical factors for any applicant to consider whenevaluating a position in a joint venture is the anticipated duration ofthe job, identity of the owners, which owner has management re-sponsibility and the presence of any owner conflicts.

The question often asked and sometimes argued is whether it isbest to work for a public or private company, a for-profit or a non-profit organization, a partnership or a sole proprietorship, a largecompany or a small one, or any other combination you wish to com-pare. The question has no answer, however, because of the enormousdiversity of businesses available to you. There are great public cor-porations to work for and disgraceful ones. There are wonderful pri-vate employers and some that no one should work for if they had analternative. In short, within each category of employers, there isgreat diversity. Because of this, the other factors discussed through-out this book are generally more important in determining if anemployer and job is best for you.

THE EMPLOYER: GENERAL INFORMATION 17

REPUTATION

The overall reputation of the employer is of importance for obvi-ous reasons; if you become a part of the organization, some of itsreputation will rub off on you. You cannot escape it regardless ofyour job’s significance within the organization or lack thereof. Fur-thermore, the quality and reputation of your prior employers will bea major factor for future potential employers in their decision to hireor reject you. Your association with past and current employers willinfluence the opinions of not only employers but also your friends.If you have been an employee of a dynamic, well respected, oftenadmired, innovative, and successful company, others will believe youhave special ability even to be selected to be a part of such an organ-ization. Certain employers—General Electric is one of the betterknown examples—are known for their high standards in the selec-tion, training, and promotion of employees. If you have been anemployee of a new company from the beginning that has succeeded,the experience will be looked upon favorably. If, however, you workfor a company that is neither highly successful or is failing, butrather is relatively unknown, it is unlikely to enhance or hurt yourreputation. Most companies probably fall into this category.

Another factor that affects reputation is the type of business yourcompany is engaged in. There are controversial businesses that are per-fectly legal, but those opposed to their activities may frown upon yourassociation. Tobacco, liquor, and gaming are the best-known andlargest sectors in this controversial category. Any association with com-panies that are financial failures or where improprieties—such asaccounting irregularities, boiler room or other high-pressure marketingtactics, unjustified litigation, stock manipulation or illegal practices—have been exposed will adversely affect your reputation, regardless ofyour level of personal involvement in these activities. Negative reputa-tions of employers linger for years after management and those directlyinvolved in the disreputable activities have been removed. If the perpe-trators of the unsavory practices are still employed, an applicant will bewell advised to continue his job search elsewhere.

Reputation is an important element in morale. A high level of mo-rale in an organization requires that employees feel they are part ofa winning team, and if they are not presently superior in any cate-gory, everyone’s objective is to become the best. To be associatedwith the best employer, management, fellow employees, strategicplans, products, and services—and thus reputation—makes working


a delight. High levels of morale automatically create enthusiasm andto work with enthusiasm is a pleasure. An employer with an out-standing reputation has the possibility of creating great morale, butan employer with a poor reputation has little chance for fostering en-thusiastic employees.

The reputation, often referred to as “image,” of an organization islargely a product of perception and is not necessarily supported by thefacts. It can also be a mixture of good and bad, as would be the caseof an employer who paid his employees exceptionally well whileremaining in endless disputes with customers. Regardless of the justi-fication for a reputation, it is what people believe about the organiza-tion that you must face. Both good and bad reputations may prove tobe understated or unwarranted but they do exist and persist. Theremay be mitigating circumstances for a particular situation that youshould be aware of. A reputation may be embellished if the employeris part of a dynamic industry, even if there is nothing at all dynamicabout the individual employer. So too can images be tarnished indi-rectly, as could result when shareholders not involved in the operationor direction of the business are accused of improprieties that are pub-licized. Furthermore, businesses controlled by high-profile, controver-sial public figures tend to acquire the reputation of those in control.

Fortunately for you, as the employee, businesses are usually veryconcerned with preserving or improving their images and havespawned an entire industry, public relations (“PR”), to assist in thisactivity. PR firms and professionals are so skilled, and the trade andbusiness press so receptive, that one should view everything in themedia with some degree of skepticism.

Your challenge in selecting a job and employer is how to learn ofan employer’s reputation. This can be accomplished through directquestioning, researching the business press, and by inference. If thereputation is well defined and established, this will be relatively easy.Businesses at either extreme are particularly easy to identify. Out-standing employers appear on lists of employers considered to befirst rate. In addition, employers with undesirable reputations usu-ally have had their misdeeds and unsavory practices well publicized.However, the reputations of most employers are not immediatelyknown and fall somewhere between the extremes. Start by asking theopinions of people you know who may be familiar with the em-ployer. Ideally, you will be able to ask former employees or existingemployees who are not involved in the hiring process. Ask the peo-ple who interview you what their perception of how the world views


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

HISTORY

To understand an employer, and eventually to become an effectiveemployee, you should learn of the employer’s history starting fromthe time of its founding. Organizations with a long history are usu-ally proud of the fact and often flaunt it in their advertising to implythey are reputable and will continue in business. Employers withshort histories are less likely to have detailed printed histories oftheir founding and activities, but their executives should be willingto describe and discuss the past. Applicants for jobs will usually findthat their interviewers are ready and pleased to discuss the organiza-tion’s history and their personal involvement and contributions to itssuccess. Questions regarding history are not only proper but also dis-cussions of the past tend to build rapport with the interviewer.Remember that you are entitled to such information. An unwilling-ness to discuss the past would be a serious warning for any applicantto be wary.

Older companies may have their histories written by professionalwriters and published in hard cover book form. They are often writ-ten to commemorate an anniversary of the founding or the tenure ofa long-serving founder or executive. Official histories usually placeemphasis on the positive aspects and gloss over or omit unsuccessfulventures that an older business is almost certain to have experienced.Failed ventures are usually readily disclosed during interviews whenasked because the participants are no longer employed, correctivemeasures were taken, everyone learned and the organization is bet-ter for its experience. Company histories definitely are worth read-ing but one should never assume that they represent the completestory. The history that will most probably affect your job is what hashappened in the past few years, facts that are unlikely to be describedin a hard cover book. Regardless of any shortcomings, official com-pany histories are an interesting starting point for prospective em-ployees to gain information.


MISSION STATEMENTS, PHILOSOPHY,AND STRATEGY

It has become quite fashionable for a business to have a formallywritten mission statement, which describes the purpose of the busi-ness and its reason for existing. These statements may be part of anoverall written strategic plan but usually is a separate statement.When a business is serious about the content of the statements, it dis-plays the statement prominently in company publications; it mayeven be framed and hung in the reception areas and throughout thefacilities. The statements are usually one-paragraph descriptions ofthe overall operational philosophy of the business and may includegoals and objectives. Mission statements are constructed with greatcare by controlling management, with every thought, sentence, andword studied, reviewed, and often debated. Their value lies in in-forming customers, investors, employees, and prospective employeesof the overall policies and direction of the business without provid-ing details. From the broad policy, more precise policies and proce-dures consistent with the overall policy are constructed. As anexample, when a mission statement includes a phrase stating thecompany’s objective is “to produce the highest-quality products inthe industry,” the design and quality control responsibilities becomeobvious. Assume formal mission statements are the gospel until youlearn otherwise but you should be alert to the possibility that mis-sion statements are not always taken seriously, become obsolete, areignored, may disappear and are replaced by unwritten policies.

In some organizations, a strategic plan may exist only in the headof the president. However, there has been a growing tendency todevelop formal written plans, which describe in considerable detailthe direction of the enterprise. Larger organizations may even haveplanning departments headed by a senior executive who is responsi-ble for drafting, monitoring, and proposing modifications to the plan.You can be certain that if a plan exists, the president and most likelythe board of directors will have approved its final form. If you areapplying for a senior management position in a company with astrategic plan, you will certainly need to know the plan’s content.This will be the framework within which you will be expected to per-form. If the company is public, the plan almost certainly has been dis-closed and touted to security analysts and is available in their reports.

Most employers do not have formal written mission statements orstrategic plans, but they do have overall policies and objectives that


are just as binding as written ones. It is difficult, if not impossible,for any organization to function in the absence of policies and anoperational philosophy that provides order and direction for theenterprise. The functional unwritten policies that are well knownthroughout the organization, and those that are actually in practice,are more important than a written statement that may or may not befollowed. A prospective employee should learn as much as possibleabout the overall policies and practices in the following major areas:

• What are the general policies relative to customer relations? Arecustomers pampered and treated with great respect or givenminimum attention, often resulting in disputes?

• What are the general objectives with regards to quality of prod-ucts and services? What level of quality and quality controlpresently exist?

• What are the general policies and practices with regard to thetreatment of employees? Are they competitive, benevolent,strictly business, or what have you?

• What is the organization’s attitude toward technology? Doesthe organization utilize the most advanced technology avail-able, both internally for the operation of the enterprise andexternally in products and services available to customers?

• What is the grand strategy of the business? Is the business togrow and how will growth be accomplished and at what rate?Is the business expected to remain stable or even decline? Arethere specific measurable objectives such as return on invest-ment of revenue growth?

Whatever the policies and objectives of the organization, a newemployee must recognize and accept the fact that they will constitutethe framework within which the job must be performed. They arenot about to change for a new employee other than for a new CEOwith a mandate for change.

ORGANIZATION AND STRUCTURE

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


parent company and the other business units it owns. If the unit wereself-contained without a parent or subsidiaries, then a chart of thistype would not exist. In this age of massive business concentrations,however, chances are you will need to know where a business unit islocated within the total conglomeration of businesses. Charts of thistype will identify other controlled companies or significant minorityinvestments that could represent personal opportunity for eventualadvancement or ones that could be an embarrassment if it encoun-ters problems that are well publicized. Charts of business units alsotend to disclose the relative importance of the unit in which you maybe 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 criticalto their overall strategy and will be supported and retained. Corebusinesses are usually not candidates for divestiture. Probabledivestiture candidates often can be identified on these charts as onesthat stand-alone and have little relationship to the other controlledbusinesses. If you are considering employment in a non-core busi-ness, questions relative to the possibility of a change of ownershipand information on termination pay policies are appropriate. Mostbusinesses with multiple units have charts of this type printed andavailable for prospective employees, but if they do not, you can askto have one sketched out for you.

The other type of organization chart more commonly seen illus-trates the reporting relationships of individuals and the departmentsor divisions within the organization in which you may be employed.Charts of this type are invaluable to graphically explain where youwould fit into the organization structure. They will help define yourscope of authority if you are a manager, as well as to identify yoursuperior and the nature of his or her reporting relationship. Thehigher up in the organization is the position for which you are a can-didate, the more important it becomes to understand the reportingrelationships throughout the organization. To function effectively,one must know each manager’s area of responsibility and who arepeers and superiors in order to respect their status. Organizationcharts tend to become outdated and where frequent revisions are indi-cated, it is wise to inquire of the causes. If an employer does not havea chart, you should ask to have one sketched out, preferably by theindividual to whom you will report. A refusal to provide an organi-zation chart, a chart that is incomplete, or one of unconventionalstructure are all warning signs of a possible unstable organization.


PRODUCTS AND SERVICES

If you have a strong desire or skills to work with certain productsor to provide specific services, special care is required in selecting anemployer. Chances are you now can identify some but not all poten-tial employers but your information may be out of date. If this is thecase, you could easily apply to an employer who (1) discontinuedactivity in the areas of your interest, (2) is no longer emphasizing theproduct lines, or (3) is an employer not in the forefront of technol-ogy. Perhaps the greatest risk is with an employer suffering from adeclining market share due to superior competitors. You also couldfind yourself in a situation with an employer engaged in the desiredactivities, but in which your job would have little or no exposure towhat you expected. As an extreme example, in airline companies asmall percentage of the employees actually fly, most have jobs on theground, and some clean the washrooms. You must always learnwhat your specific job will be and not rely on a business’s name oron outdated information.

Names of businesses, and their image as to the products manu-factured or services provided, may be misleading. Rarely is thisintentional but rather a result of changing circumstances with whichpublic perception has not caught up. Older businesses, in particular,may have well-known names that are extremely valuable for mar-keting purposes, but through evolving product lines and diversifica-tion, the names no longer reflect the activities with which they areassociated. Certain high-technology and Internet companies haverapidly evolved into new activities that could also be misleading ifone was basing their interest in a business on the name alone.

Every organization has employees engaged in support services inwhich knowledge of the product or service is not as important asother skills. Accounting, human resources, and the many informa-tion system jobs are examples. While not involved directly with theproducts or services, these jobs are more satisfying if the products orservices are interesting and even exciting. In nearly all businesses,some knowledge of the basic activities is helpful and often essentialto those in support jobs.

Cyclical and seasonal businesses have demands and risks of whichyou should be aware. These industries historically have wide swingsin their level of business, usually requiring significant increases ordecreases in employment levels. Examples of cyclical businesseswould be the construction and petrochemical industries and all of


their suppliers These periodic fluctuations are usually caused bychanges in the overall economy. Few industries are recession proofbut these are less so. Cyclical businesses tend to be far more sensitiveto the ups and downs of the overall economy than other businesses.Most cyclical businesses try to retain their key and outstandingemployees during the low point of a cycle, but the severity and dura-tion of the downturn and the financial resources of the employer willinfluence how many keep their jobs. As an applicant, you shouldexplore the probability of continued tenure in a company subject toextreme fluctuations in business levels. Start by assuming the busi-ness will continue to experience business cycles and don’t be deludedinto believing current levels will continue indefinitely. A basic ques-tion is what happened to key employees during the last downturn, ifthe employer has been in business time enough to suffer through adownturn. For newer businesses in cyclical industries the questionshould concern personnel plans in the event of downturn, but itwould be a rare company that had plans other than a terminationpay policy. If the employer and job in a cyclical industry are appeal-ing to you, you probably should not be deterred from accepting thejob but should, rather, recognize the inherent risk.

Seasonal businesses have some of the characteristics of cyclical busi-nesses but for most applicants for permanent jobs, a major questioncenters around the probable requirement to work very long hours dur-ing the peak season. This obligation to exert maximum effort duringthe peak season is critical to the employer because it is the most prof-itable time of the year. You must be prepared to work the long sea-sonal hours if you accept a position in this type of business becauseany shirking of hours would almost certainly be unacceptable. Retail-ing is the most obvious example of a seasonal business.

STATUS OF TECHNOLOGY

The status of the technology offered in an employer’s productsand services and the technology used in production and marketingwill influence the company’s competitive position and its ability tosurvive. Technology available today and under development willcontinue to have such a profound effect upon nearly every businessthat it should be a key factor in an employer evaluation. Applicantsare wise to seek out employers with a policy to utilize or developstate-of-the-art technology because they tend to succeed. Working insuch an environment can be exciting and the experience gained can


facilitate career objectives. Experience with a company known for itstechnology will be an impressive addition to your resume.

Products and services sold to customers that incorporate or utilizestate-of-the-art technology are usually advertised with informationreadily available for your review. The technology used in the pro-duction of products and support services may be just as important tothe enterprise’s success; however, information about this type oftechnology in printed form is seldom available. Automation equip-ment, process systems, and information systems that incorporate thelatest technology and are functioning as planned often are the hall-marks of a successful employer. Your interviewers should be pleasedto describe the technology because most employees in technologi-cally competitive or advanced companies are proud of what has beenaccomplished and what is on their horizon. Questions such as,“What new technology has been introduced into your business dur-ing the past year?” or “How do you compare your overall level oftechnology with competitors?” can be used to introduce the subject.

The impact of the Internet upon the business must be reviewedand important questions should be asked to learn the employer’spresent involvement on the Net, the positive or negative influence ofe-commerce on revenues to date, and what the outlook is for thefuture. All agree that the Internet will produce enormous changes inthe conduct of business but what the changes will be and their mag-nitude is open to much speculation and debate. You will have toreach your own conclusions when evaluating an employer in thisdepartment, 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 commu-

nications?• How does management foresee the role of information technol-

ogy in the business?


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

PHYSICAL APPEARANCES

You can learn much about an employer from close observation ofthe physical facilities and the organization’s activities. Some condi-tions 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 bewhen you are interviewed. From your observations you should beable 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 applica-tion in selecting an employer and should only be viewed as a warn-ing to verify your observations before reaching conclusions. Chancesare you will learn little to contradict your original observations.

If you are interviewed in an office building occupied by the em-ployer, observe the quality and age of the building. A good-qualityoffice building indicates at the very least the employer’s desire tohave employees working in good conditions. It shows that the em-ployer can pay either the rent or the cost of the building if owned. Apoorly maintained building should be a warning of possible financialdifficulties. If the building has a directory in the lobby or receptionarea, look to see how much space the employer occupies and whothe other tenants are. The space occupied can give you informationas to the employer’s size at this location and the activities conductedthere. If there are other tenants, it will be worthwhile to learn whothey are and whether they have a relationship with the employer.


Questions about other tenants during the interview can often lightenthe conversation, particularly if they are unusual or prestigiousorganizations. If they are disreputable or controversial, or are onesthat attract large numbers of visitors, you should ask why the em-ployer is there at all and whether relocation is being contemplated.

Stand-alone facilities owned by an employer that are part of acomplex of buildings occupied by an employer, such as a manufac-turing plant, offer their own clues. If you are driving to your inter-view, take the time to drive around the entire facility to see how wellit is maintained, the activity of employees, its size, and the conditionof the neighborhood. A well-maintained facility with a full parkinglot and substantial truck traffic is associated with an active andgrowing business. Anything less is often an indication that the busi-ness is operating under capacity. Inventory or other equipmentstored in substantial quantities outside the buildings may also pointto possible problems in the business.

Probably no better visual indicator of a business’s activity levelexists than the amount of vacant space in both the employees’ andvisitors’ parking areas. It is a good sign if you have difficulty withfinding a place to park. The general quality of the parked automo-biles may also be indicative of compensation policies. The number ofautomobiles still in the lot into the evening may indicate that em-ployees keep long hours or that there are several shifts, or both.

The neighborhood surrounding the facility in which the job is lo-cated or based could be ideal or present a difficult situation. The ab-sence of crime and the perception that crime is improbableconstitutes the best condition, although there is always the chancethat crime and threats to one’s safety could occur anywhere. Not allcrime originates in the immediate neighborhood, but the type andappearance of the area often suggests the probability for such activ-ity. Frequently, there is ample visible evidence when crime is a prob-lem because of the presence of uniformed security guards, securitypatrols, rigidly followed sign-in and identification procedures, andsecurity fences topped with an abundance of barbed wire. Youshould take the opportunity to ask any security personnel involvedin your admittance about their views on the extent of area crimesand when the last crime occurred. During your interviews, youshould feel free to inquire about security issues, including those asso-ciated with transportation. Ask specifically about the most commonproblems for employers: theft and drugs. Whether you drive your


own automobile or take public transportation, you will be con-cerned with your personal safety and asking questions on this frontis certainly legitimate.

Once inside the facility, your observations to gain insight into theemployer should continue. What you see will be your work environ-ment if you accept a job. Consider the following:

• Does it look like the kind of place in which you would like towork?

• 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 ofa business downturn and possibly of organizational instability. Arethe employees actively involved in their work or are many standingabout appearing to be doing little? As you pass bulletin boards, readas many of the notices as possible to learn of current activities orpolicies affecting employees. What is the composition of the work-force, and do they look like people you would enjoy as friends? Bealert to how the employees relate to each other? Are they friendlyand cooperative and appear to be working together or is there obvi-ous tension? Your observations are of particular importance becausethis is the immediate environment in which you will work if you takethe position.

MAJOR ASSETS AND POTENTIALPROBLEMS

Two primary purposes for reading this book is to help you recog-nize the positive attributes of an employer that can strengthen your joband to help you avoid employers plagued with problems that couldadversely affect you. Attributes, or assets, enable the employer to enjoydistinct advantages over competitors and ensure financial stability.However, problems can be of such severity that the job in question willbe eliminated, management so distracted that the basic business isignored, or the job for which you were employed experiences a dras-tic change in its responsibilities. Some aspects of a business may proveto be either an asset or problem, depending on its characteristics.There is no better example of this duality than marketing.


Marketing: A Two-Edged Sword

Marketing is the broad category of activities devoted to selling abusiness’s products and services. There are three basic measures of itssuccess: gross profit, market share, and total sales revenues. Grossprofit is the difference between selling price and direct cost to manu-facture the product or provide the service. A stable or increasing per-cent of gross profit indicates competitive pressures are not severe andprices are not discounted to affect sales. An unexplained deteriorat-ing gross profit percentage or a decline in the absence of realistic cor-rective measures should cause applicants to be wary. Market share isthe percent of the total market the company enjoys. A declining mar-ket share is indicative of serious problems that must be addressed andfrequently involves personnel changes. Total sales revenues are anindicator of the success or failure of marketing that is readily observ-able with access to the business’s financial statements. Rising or de-clining sales affect the entire organization, and the causes are asubject of major importance in every employer evaluation. Even whenall the indicators are favorable, management rarely is satisfied withtheir current level of business. The result may be frequent tinkering oreven major changes in marketing to improve matters. Rare is the salesexecutive who is not trying to increase sales and those who fail to doso cannot expect to remain in their positions indefinitely.

Legal or Regulatory Problems

Environmental issues can affect the entire nature of a business andeven shut it down for extreme violations. Actual shutdowns are un-common and would rarely occur without repeated warnings fromregulatory agencies. However, threats of heavy fines or shutdownsare common if remedial actions are not undertaken to eliminate en-vironmental hazards, and must be taken seriously. In some cases, thecost of remedial work or pollution control equipment may be solarge that the business cannot survive or the cost will severely restrictthe basic activities of the business. Businesses known to be signifi-cant polluters tend to become very controversial, shunned by somepotential customers and their employees often rudely treated. Ignor-ing environmental standards is no longer socially acceptable, andbusinesses engaged in activities adversely affecting the environmentor in disputes with regulatory agencies over remedial measures be-come pariahs in the eyes of many. Applicants considering employ-


ment in businesses with poor environmental records should be fullyaware of the problems they may encounter if employed.

The outcome of legal and regulatory issues can have a positive ornegative material effect upon any organization. Chances are goodthat if there are lawsuits or regulatory issues of such magnitude thatthey could influence the nature of the business, they are already wellpublicized, easily identified, and informed speculation exists as to theprobable resolution. The settlement of these controversies results inwinners, losers, or compromises with your employer in one of thesecategories. You should attempt to estimate the parameters of theprobable outcome and, most important, whether your job could beaffected. Nearly all employers of any size are involved in some liti-gation at some time, but you need only be concerned if the outcomecould have a major impact upon the business. Antitrust cases, patentinfringement suits, and class action suits are examples of suits thathave the potential to change a business. Don’t be shy in asking ques-tions during your interviews when problems appearing significantexist. If the problems are serious, you can be certain your interview-ers are knowledgeable because they are personally concerned fortheir jobs.

The stance or policies of an employer toward litigation or the gov-ernment often demonstrates attitudes held by management that maynot be articulated in any other forum. A determination to contestevery suit, right or wrong, rather than seek less costly compromisesettlements may be good for the ego but not the bottom line. A largevolume of unsettled or delayed litigation with the employer as defen-dant can either be evidence of management intransigence or aninability to absorb the cost of settlement. Substantial numbers ofcases with the employer as plaintiff usually indicates an overly ag-gressive attitude or a serious problem attempting to be controlledwith litigation. The higher up in the management structure one isapplying for a position, the more important it is to learn the causesof excess litigation.

LOCATING EMPLOYER INFORMATION

Now that you are aware of the types of information to researchon prospective employers, how does one find it? Public informationis readily available on most employers. Every applicant will find ituseful to gather as much information as possible, but it is hardly nec-essary to conduct an expensive or surreptitious investigation. The


public information will be of greatest value in preliminary screeningand as a basis of questions in eventual interviews. For public com-panies you will readily find more information than you can possibleabsorb, but for some closely held, private employers, informationmay be scarce or nonexistent. The following are sources of informa-tion 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 reportsfiled with the Securities and Exchange Commission (SEC) can befound at www.sec.gov. Companies whose shares are publicly tradedmust file reports quarterly, annually, and whenever unusual eventsoccur with the SEC. The reports are immediately available to thepublic, and they tend to be written with precision because it is a seri-ous offense to submit false or misleading information in SEC filings.The reports may or may not contain data on the subsidiaries of apublic company, but they are worth checking and information on theparent company is always of value. Reading SEC reports coveringthe last few years can be tedious work because of the style and vol-ume of detail, but it is certainly worth the effort.

More current information on public companies is found accompa-nying the stock prices quoted on the Internet. Summary financial infor-mation, recent news releases, trends, and analysis are readily available.If the employer’s stock has had a definite decline or a favorable increasein price, it will probably be mentioned in your interviews. If the stockhas had a rapid increase or decrease in price during the month priorto your interview, it is a priority issue for you to learn the cause.

The amount of additional information that can be found on theInternet is partly a function of one’s skill in “surfing the Net.” Mostemployers now have a Web page describing the company and theproducts and services. Company Web pages are designed to provideinformation for prospective customers rather than applicants but theymay contain helpful information. Most employers seem impressedwith their own Web pages so dropping a favorable comment about thehome page probably won’t hurt your cause. More skilled “surfers”should be able to locate additional information on the employer andthe industry in which it functions. Gossip (albeit of questionable value)found in chat rooms is also a possible source. Other Web addressesyou may find helpful in your search are listed below.


www.corporateinformation.com Corporate Information providesnumerous sources of information both domestic and foreign.

www.corptech.com Corptech provides information on manufac-turers and developers of high-tech products.

www.dnb.com Dun & Bradstreet provides reports for a fee. It hasbeen the largest and most reliable provider of credit informationto businesses for decades.

www.forbes.com/tool/toolbox/private500 Forbes provides infor-mation on 500 top private companies.

www.companiesonline.com CompaniesOnline provides basic in-formation, such as addresses and telephone numbers of public andprivate companies.

www.bbb.org The Better Business Bureau can provide informationon businesses that have been reported for dubious business practices.

monstertrak.com Contains information on a limited number of com-panies. 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 publica-tions devoted exclusively to that specialty. They contain industry infor-mation and statistics, articles on companies and individuals, reports onanything that could favorably or adversely affect the industry, trends,and new developments. The publications are either sold or distributedfree to most everyone in an industry, so the probability is high thatthose who interview you will have read the last issues. Anyone certainof the industry in which they wish to be employed or who has accepteda job would be wise to subscribe to the leading publication in theindustry and to request a few back issues. You can learn the name ofthe leading publication during your interviews and could probably ob-tain an old copy from which you can secure subscription information.You can also find the name of the leading publication at your publiclibrary. Ask for SRDS Business Publication Advertising Source (pub-lished by McGraw-Hill) and select the publication with the largest cir-culation and any others that appeal to you.

Analysts

Investment banking firms employ security analysts to study pub-lic companies and industries and publish reports on their findings.


The reports are prepared for financial investors and contain histori-cal information as well as performance forecasts. Most of thesereports appear to be of high quality because of the analyst’s skill andaccess to information not readily available to others. The quality oftheir reports reflects directly upon the reputation of their investment-banking firm that takes pride in the research. Research reports areone of their most important marketing tools and should be viewedas such. The basic information is usually reliable but the conclusionsand recommendations are suspect. The New York Times reportedthat out of 8000 reports only 29 had “sell” recommendations. To re-ceive copies of reports, request assistance from a stockbroker. Youmay find some of the reports through the Internet.

Reference Publications

There are a number of common reference books found at the pub-lic libraries but how many are available will depend upon the sizeand nature of the library. Information found in these books may notbe as current as data you may have located on the Internet or fromother sources because most reference books are published only an-nually. There may be other reference publications not listed belowfound in the library and you should ask the librarian for assistance.

D&B Million Dollar Directory Lists alphabetically both publicand private companies, names and titles of officers, sales, andemployee data.

D&B Reference Book of Corporate Management Lists sales andnumber of employees and short biographical sketch of key execu-tives.

Wards Business Directory Lists both public and private companiesarranged by SIC code. Basic data includes sales, number of em-ployees, and total assets.

Thomas Register Designed for purchasing people and containsproduct descriptions, general size of the business, and names ofsome executives.

Standard & Poor’s Registry of Corporations Volume 1 containsbasic information on companies including sales, number of em-ployees, and names of officers and directors. It also indicates if thecompany is a subsidiary and the name of the parent. Volume 2lists officers and directors and biographical data on each.


Thomson/Polk North American Financial Institutions DirectoryList 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 industrytype, industrials, transportation, utilities, and banking and finance.The information is extensive but probably can be located more eas-ily on the Internet.

Wall Street Journal Index This master index of all articles publishedby the newspaper can be searched for the employer you’re consid-ering. The index also provides a brief subject for each article.

Directory of Corporate Affiliations-Master Index Contains infor-mation on who owns who making it possible to learn the compa-nies owned by a corporation. It is a source to learn the parentcompany of a company you are evaluating.

All information you receive should be treated with some degree ofskepticism. The most reliable source will be reports required by thegovernment because of the penalties for providing false information.The least reliable will be newspapers and business and trade maga-zines because many of the articles are inspired, promoted, or evenwritten by someone who had a purpose in their publication. Eveninformation received orally in your interviews may be slanted becausethey are “selling you,” or the presenter just has his or her own biases.

Gathering information about a prospective employer requires an in-vestment in time and effort that is minuscule compared to the poten-tial risks and rewards. You are about to commit a portion of yourcareer; a portion that never can be recovered and you cannot afforda mistake. The information described in this chapter and the follow-ing for you to seek is to help you achieve your career aspirations.



❐ 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 phi-

losophy?❐ 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 interestfor most, but others may mistakenly treat it as a boring irrelevancyor simply beyond their comprehension. Regardless, it is a matter ofgreat importance to every employee and prospective employee be-cause the financial capability of the employer will influence all as-pects of the business. The presence of job openings in and of itself isnot evidence of financial health. Adequate financial resources arenecessary for your job to continue to exist. A prosperous businesscan grant wage increases, provide generous employee benefits, train-ing and long-term programs, and a work environment that may bedemanding but pleasant and even exciting. The ability of a businessto grow is made possible or restrained by the funds generated frombusiness activities, funds within the business or available from out-side sources. Growth of a business usually creates job opportunitiesand possible advancement for you. Insufficient funds will cause abusiness to stagnate or decline and both conditions are detrimentalto employees. Wage freezes and reductions, layoffs (or the threat oflayoffs), and a rancorous work atmosphere are the hallmarks of afinancially sick company. In their efforts to return to profitability,businesses tend to place unrealistic demands on employees, undergofrequent organization changes, layoff employees and cancel long-range programs popular with employees. There is a basic questionfor which you need an answer: “Will my job be favorably or ad-versely affected by the employer’s financial condition?”

While the latest reported profit or loss of the employer is of impor-tance, it should not be the only factor in an evaluation unless the

37

finances are clearly desperate. There are very profitable businessesmanaged by individuals that treat their employees miserably. There arecompanies losing money with adequate resources to continue (and thatanticipate becoming profitable) who treat their employees generouslyand constitute exceptional opportunities. The technology companiesthat are well financed despite losses are obvious examples although theycannot survive indefinitely without becoming profitable. In your searchfor an answer to the basic question, you should not be quick to drawconclusions before seeking explanations and recognizing exceptions.

You do not have to be a financial wizard or expert in forensic ac-counting to gain a general understanding of the employer’s financialcondition. A rudimentary knowledge of accounting will be helpful,but you can attain a reasonable understanding with common senseand a refusal to be intimidated by financial reports. A completeknowledge is impossible for most applicants because they will nothave access to detailed supporting data; therefore, a general under-standing of the financial condition of a company is what you areafter. There are two general categories of subjects to pursue to an-swer the basic questions:

1. Is this company profitable?2. Does this company have the funds or access to funds to con-

tinue operating and to grow the business?

The depth of the research required to find the answers varies fromemployer to employer, but in all cases it is your responsibility to con-duct it; your success is a function of your effort. A limited back-ground in accounting and finance can easily be offset with awillingness to ask assistance from knowledgeable friends. For theunsophisticated in finance, financial issues and statements representa bewildering maze of terms and mathematics. You should not bedeterred, however, because you are only seeking general answers tothe basic two questions. Those more skilled in financial analysis andall applicants for management positions should attempt to learnmuch more from the financial statements than answers to the twobasic questions outlined above.

SEEKING INFORMATION

If you are applying for a job in a privately held or a nonprofit busi-ness and are not seeking a senior management position, financial


statements may be withheld from you. Private companies, in particu-lar, are often very secretive with their financial statements and may bereluctant to provide even general information. Anyone applying for asenior management position with profit responsibility must insistupon having access to the financial statements prior to accepting theposition in order to evaluate the job and to determine if the em-ployer’s objectives can be achieved. These financial statements shouldinclude any current budgets for the segment of the business that willfall within an applicant’s sphere of responsibility. Failure to reviewfinancial statements would be a serious mistake on the part of theapplicant. Applicants for lesser positions may have to be content withgeneral assurances from interviewers regarding the financial condi-tion of the business. Those who are interviewing applicants may notalways have access to the financial statements and may be unable toprovide the factual data. Whatever the conditions, an effort shouldalways be made to determine the financial condition of the businesswith a combination of questions, direct observations, and, ideally,from access to the financial statements. For private companies, youmay have to be content with whatever information the employerelects to disclose or that can be gathered by other means. For publiccompanies, all information except the most current is available on theInternet (www.sec.gov), as was discussed in Chapter 2.

Unavailable Financials

Problems similar to those described above for privately held busi-nesses may be encountered when applying for positions in sub-sidiaries or divisions of public companies. The financial reports ofthe parent company are readily available, but they customarily dis-close little or nothing about the performance of individual sub-sidiaries or divisions. However, the parent must disclose results by“industry segment,” and this data can be particularly revealing whenthe subsidiary or division is of such size that it constitutes a completeindustry segment. Since the management of the parent is compen-sated to demand results in all segments of the company, one cansafely assume a highly profitable segment is supported and givensubstantial independence in its operations. A segment that is unprof-itable or barely profitable will undoubtedly be under pressure to im-prove, probably have its independence curtailed, and may even be acandidate for divestiture. A rough guide to parent companies man-agement’s opinion of its subsidiaries is the sequence in which they

THE EMPLOYER: FINANCIAL CONDITION 39

appear in the annual reports. The favorites are listed first and the leastfavorite last, and those without illustrations or photographs or notmentioned at all are in trouble or are often considered insignificant.

Only Part of the Picture

You should be aware that financial statements only record historyand may or may not provide insight into the future; they are neverthe whole story. Insight from financial statements has to be supple-mented and verified with information gained during interviews andfrom other sources in order to reach valid conclusions. Supplemen-tal information will often be more important than whatever is foundin the financial reports. Financial reports are by their nature out ofdate when printed and only purport to represent the financial condi-tion on a given date. Annual reports are most commonly given toapplicants because they provide financial data and frequently consti-tute colorful sales brochures describing the company. They also illus-trate the problem of out-of-date financial information. Most publiccompanies’ fiscal year is the same as the calendar year ending onDecember 31, with the annual reports printed and distributed earlyin the following spring. The result is that if you are given an annualreport in the period from October to April, you will have financialdata that is nine to fifteen months out of date. Much can happen inthat amount of time, and you may need to update your informationwith quarterly reports, which are also available on the Internet. Sincethere are legal constraints on public companies releasing selectivelyfinancial information, you probably cannot acquire data more cur-rent than the most recent quarter, nor is it necessary to do so.

PROFITS AND LOSSES

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


express an opinion in a letter found in their report. If they find nothingwrong with the business’s accounting, they will so state and give whatis called a “clean opinion.” However, if they find a problem of majorproportions that cannot be quantified, they will give a “subject to”opinion, indicating that the condition of the company is subject to theoutcome of future events that may be good or bad. If the auditorsbelieve the business is in serious trouble, they will give a “going con-cern” opinion, which indicates that unless drastic changes are effectedand new capital is injected into the business, it will be a candidate forbankruptcy. For an applicant, anything other than a clean opinionshould 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 containexplanatory 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 willshow in a numerical summary the profit or loss of the business. Ac-counting terminology is not fully standardized and this report canhave a variety of headings such as “Income Statement” or “State-ment of Operations” or “Profit or Loss Statement” or some othervariation. Regardless of the title, the first line with numbers is “Rev-enues” or “Sales,” which is the amount of money received by thebusiness from all sources, usually customers. The last line is “Net In-come or Loss,” which is the profit or loss of the company after pay-ing all expenses, including taxes.

The net income or loss amount is a key partial answer to the ques-tion of the business’s profitability, but other factors have to be con-sidered. If a loss is reported, you are safe to assume the business lostmoney because no management enjoys reporting a loss; questions willremain regarding the cause and magnitude. If a profit is reported,there is much more to learn to make the reported amount meaning-ful. You have yet to learn the accounting methods and policies usedto calculate the profit and source of the earnings. You do not know ifthe profit represents a reasonable return on the shareholders invest-ments or how the profit compares with other comparable companiesand competitors. Is the profit an improvement over prior periods ora decline? If it is virtually identical to prior earnings, it may be cleveraccounting rather than a remarkable coincidence. You also need toknow how much of the profit came from operations and how much


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

Loss Businesses

A business losing money may be one to avoid or possibly a greatopportunity, depending on the causes, severity of the losses, ade-quacy of funding, and most critical, the probability of returning toprofitability. The company that has been losing money for an ex-tended period of time, is running short of cash, and has littleprospect of returning to profitability probably won’t be in existencemuch longer, at least in its present form. The absence of a logicalplan to return to profitability without evidence of adequate funds toimplement any plan is a high-risk situation for applicants as well asfor present employees. Applicants for positions with losing busi-nesses should be extremely careful to evaluate optimistic scenariospresented by interviewers who are desperate to fill jobs. The inter-viewers’ own careers are involved and their presentations, probablyreflecting their honest convictions, may be clouded by the humantendency to hope for the best.

Losses from Restructuring

A business reporting a loss for the first time may be admitting aserious decline that started long before the first loss was reported.This is particularly true when a large loss is announced as part of arestructuring plan. These customarily involve recognition of priorlosses by writing down the value of assets, identification of assets,and operations to be discontinued or sold and the establishment ofreserves to offset future losses. Losses of this type tend to coincidewith the installation of new management not wanting to be saddledwith prior management’s errors. Restructuring losses invariably sig-nal the introduction of a new strategic plan, and an applicant shouldlearn how the plan could affect his job. Public companies usuallyannounce restructuring programs with fanfare, in hopes of pacifyingtheir shareholders and encouraging new investors. The publicityreleases should be available and studied by applicants. Jobs that areimportant to the success of a new strategic plan can represent a realopportunity if they are well defined and possible to accomplish.


Creative Accounting

Certainly, a profit reported is better than a loss but more informa-tion than is found in financial statements is required to reach conclu-sions. Accounting language is largely mathematics but it is not as exacta science as physics or chemistry. Management and their accountantshave discretion in the methods and policies used to develop financialstatements, and while most of these techniques are quite proper anddefensible, others have purposes that preclude accurate reporting toshareholders and the Internal Revenue Service. Unfortunately, mostapplicants or employees will not have been previously involved inoverseeing or preparing financial statements and therefore will lack thebackground or sophistication to recognize accounting that has beenmanipulated for dubious purposes. Fraud involving improper account-ing does occur and is well publicized, but major fraud cases representonly a small percentage of all businesses. Even for those with extensivefinancial backgrounds, improper accounting may not be apparent oreasily detectable. Management incentive plans that reward profit per-formance are also an incentive for operating managers to deceive theaccountants. Applicants’ as well as most employees’ first indication ofimproprieties may be when the employer publicly announces that theprior year’s earnings are being restated (invariably downward), share-holder suits are filed, a senior executive or the auditors resign, or thatthere is an SEC action being taken against the company. Once possi-ble accounting irregularities are disclosed, the odds are great the com-pany will be in turmoil and unstable for a long period of time.Applicants for finance, accounting, or senior management positionsshould have many questions on current accounting philosophy, poli-cies, and the reliability of the statements. Those knowledgeable inaccounting should make an effort to ascertain before starting a job iftheir policy convictions are compatible with the employer’s.

Level of Profitability

The level of profitability also has to be considered. Since the actualdollar amount of profits is partially a function of the size of a busi-ness, percentages become more important to assess the quality of thefinancial performance. The most common criteria used to evaluatethe adequacy of profits are return on investment (ROI) and bench-mark comparisons with comparable companies and competitors. Onecan assume that for a company enjoying profits that produces a


superior return on investment and one for which the percentage ofprofit compares favorably or better than competitors, the companyfrom a financial standpoint is very much worth considering. If thereverse condition prevails, caution and explanations are required.

To calculate the return on investment, look on the liability sectionof the balance sheet near the bottom and, you will find a summaryline labeled “Shareholders’ Equity” or “Total Stockholders’ Equity”or “Shareholders’ Investment” or some other variation. Divide thenet profit for the year by this amount and you will have the per-centage return on investment. As an example, a company with share-holders equity of $10 million that earned in a year $1 million wouldhave a 10 percent ROI. This percentage should be substantiallyhigher than the percentage yield on 30-year government bonds, whichis considered the benchmark risk-free investment. How much higherit should be will vary by industry, but in any case it should greatlyexceed the benchmark and anything less requires an explanation.

Industry comparisons are more difficult to acquire but worth theeffort. Your best source is a securities firm that has an analyst whospecializes in the industry and has published a current report oneither the industry or a company in the industry. Individual companyreports frequently contain data on the entire industry or at least theimportant competitors. If you know a stockbroker, ask for his assis-tance. If his firm does not have an analyst following the industry, hemay be able to provide suggestions. Your banker may also haveindustry comparison data, which is used to evaluate commercialloans. Large public libraries in their business reference sections oftencarry 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 thecompany in which you are interested is performing in relation tocompetitors. Superior statistics usually are associated with superiorcompanies and substandard data is a major caution sign.

BALANCE SHEET

Another key part of a company’s financial statement is the balancesheet and it is usually labeled as such. The balance sheet consists oftwo parts; the first lists assets and the second a combination of lia-bilities and shareholders’ equity. It is a numerical summary statementof the resources and financial health of the company as of a priordate. All sections of the financial statements could be subject to


extensive analysis with every line questioned, but those not skilled inanalysis should concentrate on a few readily understood portionsand should primarily be looking to identify problems. A very strongbalance sheet would be one with a positive current ratio, no intangi-ble assets, little or no debt, and high shareholders’ equity, whereas aweak one would be deficient in one or more of these areas.

The current ratio is simply a means of comparing the assets con-vertible into cash with the bills to be paid within one year. Partwaydown the asset side of the balance sheet will be a line labeled “Cur-rent Assets,” and in the liability section will be a line entitled “Cur-rent Liabilities”; the ratio is calculated by dividing the assets by theliabilities. The higher the number that results the better, but if thenumber is close to or less than one, the business may be having trou-ble paying its bills. This is a very rough guideline with many excep-tions and explanations possible, but any ratio below one is a seriouscaution sign for an applicant. It is unpleasant and difficult to workin an environment restricted by a shortage of cash and with theembarrassment of having to continually put off creditors.

Intangible Assets

Intangible assets are usually recorded in the assets under “OtherAssets” normally found after the current and fixed asset sections ofthe balance sheet. These are assets with a history worth investigatingand often reveal much about the employer. Very large intangibleassets in relation to shareholders’ equity should represent a cautionsignal for applicants. Intangible assets are invisible as their nameindicates and they may have current value, but they will have to bewritten off (amortized) over a period of time and will eventually dis-appear from the balance sheet.

Management often elects to write off intangible assets on an accel-erated basis or all at once because many investors believe they are anegative factor in evaluating a company. The most common intangi-ble is goodwill assumed when the employer acquires another busi-ness. Goodwill is roughly the difference between the amount paidfor the business and the shareholders’ equity of the acquired com-pany. Whether this indicates excess payment for the business or a fairand justifiable purchase price will depend on how well the acquiredbusiness performs. Regardless of performance, the goodwill is aninvisible asset, worthless if the business is liquidated, and of no valueas collateral for financing purposes.


Other intangible assets may consist of expenses that were capital-ized rather than treated as a current expense in the year when in-curred. Research and development expenses associated with thedevelopment of new products or services, start-up costs and certaincosts of acquisitions are examples of expenses that may be capital-ized and amortized over a period of time. The effect of capitalizationis to increase income in the year the expense occurs. Some expensesare capitalized because of tax law or accounting requirements, butmuch of it is management exercising its discretion to enhance currentincome. The presence of substantial intangible assets on the balancesheet is a good subject for any applicant to pursue because of theinsight into an employer’s business philosophy gained from explana-tions of their origin and continued existence.

Debt and Equity

The amount of long- and short-term debt should be reviewed toestimate 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-termdebt reported separately just before the section usually entitled“Shareholders’ Equity.” Short-term debt is due to be retired withinone year, and a business should have plans on how this will be ac-complished. If the amount appears unduly large, an applicant shouldfeel free to inquire about the plan. The same question is appropriatewhen the long-term debt is large in relation to the shareholders’equity. A key ratio used by financial analysts in evaluating the finan-cial health of a business is the debt-to-equity ratio. Unfortunately foran applicant, there are no precise accepted standards, and opinionsvary among analysts as to what is a satisfactory or alarming ratio.As a very rough guideline for nonfinancial applicants, wheneverlong-term debt exceeds equity, questions are in order as to how thedebt will be retired.

Shareholders’ equity is the final portion of the liability section ofthe balance sheet and essentially records the value of the assets afterdeducting all liabilities. It should not be confused with “market cap-italization,” which can be calculated in publicly traded companies bymultiplying the number of common shares outstanding by the cur-rent market price of each share. A comparison of market capitaliza-tion with shareholders’ equity is an indication of what the investingpublic and security analysts think of the business, its management,


and future prospects. The greater market capitalization exceedsshareholders’ equity, the higher is their opinion of the company andits future. When market capitalization is about equal or lower thanshareholders’ equity, their opinion is dark indeed, and the probabil-ity is high that changes in the company are in order. From an appli-cant’s point of view, seeking job security and potential foradvancement, the higher that both the shareholders’ equity and mar-ket capitalization are, the better.

CASH FLOW

The third important report in a financial statement relates to cashflow and similar to the profit and loss reports, it comes under a vari-ety of titles. “Statement of Utilization of Funds, Statement of CashFlows, Source, and Application of Funds” or some other variationmay be found heading the reports. Cash flow reports record wherethe business received and spent its cash during the period the finan-cial statement covers. It usually ends with a summary line, indicatingwhether the business ended the period with more or less cash than itstarted. There is a tendency for the less experienced to concentratetheir financial valuation on the profit and loss page and balancesheet and to not carefully study the cash flow report. This is a mis-take not made by those sophisticated in financial evaluations whogive full attention to cash flow. They know the cash flow report canoften be the most revealing and important of all the reports. A thor-ough applicant should do the same because it is impossible to under-stand fully the financial condition of a business without studying allparts of a financial statement. Every line of the cash flow statementis worth studying because of its potential to reveal critical informa-tion about the employer.

It is quite possible for a business to be reporting a profit but benear bankruptcy because it is paying out more cash than it is receiv-ing. A common example would be when products or services havebeen provided to customers and the sales properly recorded as areceivable, but the customers either refuse to pay or are allowed topay late. Receivable build-ups can be caused by disputes with thecustomers, overly generous payment terms granted to encouragesales, and accounting practices resulting in income being recognizedprematurely. In almost all cases the cause represents managementfailure. Income can also be misleading when it is of an extraordinarynature that will not occur again. Examples would be the sale of a


business unit or a major piece of real estate for a profit or the favor-able outcome of litigation. Extraordinary income buys time but itdoes little to build the basic business employees depend upon.

The opposite condition may be true with a business reporting aloss but actually having a positive cash flow and not in any immedi-ate financial danger, although it is not a condition that can go on for-ever. Some of the causes are large depreciation charges associatedwith start-up costs or major capital expenditures, restructuringcharges involving a write down of assets, and reserve for futureexpenses or the sale of assets.

Applicants who study the cash flow statement line by line willacquire insight into the employer’s method of operations and ap-proach to financing the business. The variety of information in-cludes: data on sale of assets, investments in new equipment (capitalexpenditures), and increases or decreases in receivable and payableaccounts that could signal major changes in the business operations.Also reported are borrowings and the retirement of debt, dividendpayments, repurchase and sale of stock, and much more revealinghow the business received and paid out its cash.

Cash flow analysis is particularly important in relatively new com-panies such as technology companies, Internet companies, and otherstart-ups. These companies typically have very optimistic founderswho are convinced of the validity of their business concept, but thebusiness has yet to become profitable and is hemorrhaging cash. Asan applicant you must carefully weigh what appears to be a greatopportunity against the reality of the company’s present cash re-sources, coupled with its ability to raise additional cash and have ade-quate funds to survive until profitable. Many start-ups have built intotheir business plans second or third rounds of financing to be derivedfrom private placements or an initial public offering (IPO), but mar-ket conditions may change making the financing difficult or impossi-ble. There is no better example than the demise of hundreds ofInternet businesses caused be their inability to raise additional capitalafter the market decline in 2000.You should be extremely wary of anycompany that can only survive with additional equity financing.

BUSINESS PLANS, PRIVATE PLACEMENTMEMORANDUMS, AND BUDGETS

There are documents that describe a business in its present conditionand plans for the future, and if they exist they should be must reading


for every applicant. Every plan has a purpose and as an applicant youwill want to understand the purpose, its reasonableness, and thechances of success. Their preparation usually involves a major effort onthe part of the owners or top management and incorporates much oftheir concepts and business philosophy. While there is no standard for-mat for these documents, there is a great deal of similarity in the for-mats. Typically, they include a description of the business, plans for thefuture, 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. Theproportion of facts to speculation varies greatly but sometimesdreams do come true. They are usually written when an individualor group wants to start a business and investors are being sought.They may also be prepared by relatively new businesses seekingadditional capital to expand and grow and in some cases to survive.Business plans have become so commonplace that any efforts by abusiness to raise money without a well-written plan has little chanceof success. Their preparation is now nearly a standard requirementand their format has become virtually standardized. Classes on writ-ing plans are routinely offered in business school curriculums andhave contributed to the standardization. Plans start with a summarythat provides an overview of the business scheme and needs afterwhich the business and its markets are described in detail and con-clude with financial data and projections. Since business plans areusually associated with new businesses, these are high-risk situationsbut ones that can constitute a great opportunity if they succeed.

Private placement memorandums, on the other hand, containnearly all of the information found in a well-written business planplus other material written by attorneys or investment bankers. In-cluded will be warnings about the risk of investing in the business thatif taken literally in all cases make it seem that only a fool would in-vest or go to work for the company. The risk warnings are certainlyvalid, but an applicant should use his own judgment in evaluating therisk. These severe boilerplate warnings are included partially to pro-tect the professionals involved in writing the memorandums but canbe frightening to the inexperienced reader. The memorandums usu-ally contain more detailed descriptions of the securities an investorwould be receiving and the rights of the security holders than is foundin a business plan. The involvement of professionals results indescriptions that are more precise, detailed, and carefully thought outbecause misled investors have recourse in the courts.


Budgets are prepared for internal use by more established busi-nesses as opposed to business plans and private placement memoran-dums that are circulated to nonemployees. They also differ in thatthey include less narrative and more financial data because the read-ers are already familiar with the business. Budgets are based on somehistory and financial data accumulated in prior periods so they haveat least a realistic starting point. The purpose of budgets is dual, plan-ning and control. Although some businesses attempt to separateplanning from budgeting, planning is an inescapable part of budget-ing since budgets attempt to predict the financial performance in sub-stantial detail for the next year or more. Budgets establish the level ofacceptable expenses for the coming periods and are used to monitorthe performance of executives responsible for the expenditures. Bud-gets are important tools in the management of any business and if youare considering a job with management responsibility, you will wantto review the budgets for your area of responsibility and also learn thenature of the employer’s budgeting process.

FINANCIAL ANALYSIS

More extensive financial analysis of a business is possible for thefinancially sophisticated, and a number of financial reports coveringseveral years are available. For those with limited but some financial ex-perience who want to engage in a more in-depth analysis of the com-pany’s finances, they will find at bookstores or libraries numerousbooks on the subject. However, it would be unusual, difficult, and un-necessary for most applicants to conduct a financial analysis of thescope performed by competent security analysts or during due diligenceinvestigations. You should also realize that regardless of the depth ofyour analysis, you are not about to discover anything the employerdoes not know and probably would have told you if you asked. Em-ployers are unlikely to take the time or be willing to give an applicantdetailed background information on every line item in their financialstatement. If the business has severe financial problems, they are prob-ably apparent without an in-depth analysis or so cleverly concealed thateven their auditors are unaware. A basic purpose of any financial analy-sis is to predict financial performance and this involves construction ofpro forma (future projections) financial statements. Applicants wouldfind it extremely difficult to produce a meaningful pro forma with theconstraints they are normally under. A partial alternative is to reviewtrends that frequently are the basis for most projections.


Trends are discerned by comparing data on financial statementswith prior periods to learn if significant changes have occurred. Themore financial reports you have, the more obvious are trends and notjust one-year aberrations. The next steps are to find the causes andprobability of the trend continuing. Then decide if the trend changesor confirms your opinion of the employer. Some trends are obvious,such as sales revenues, pretax profits, and total administrativeexpenses. Others are important but require simple calculations. Thepercentage of gross profit trends can be most revealing. Gross profitis the profit that remains after subtracting all direct expenses from theamount received from customers. An increasing gross profit percent-age may be due to increased prices, lower costs, or both. A decliningpercentage can indicate the opposite is happening and may signal thatserious problems exist within the company. Effective management iscontinually striving to increase the gross profit percentage.

Footnotes to the financial statements can be most revealing but oftenrequire considerable business sophistication to understand. They arewritten with care and precision to reveal the minimum necessary but nomore. Appearing after the three main financial reports in audited finan-cial statements or annual reports, the notes cover a wide variety of sub-jects the auditors believe necessary for understanding the obligations,financial performance, and condition of the business. Information onindebtedness, status of litigation, accounting principles, cost of acquisi-tions, leases obligations, taxes due and paid, and compensation plansare all subjects covered in footnotes. As a general rule, the more volu-minous the footnotes, the more carefully they should be studied. Exten-sive footnotes may indicate a company is involved in many activities ofa controversial nature with the outcome uncertain and their auditorsare determined that all should be disclosed.

The importance of your having a general understanding of thefinancial condition of the employer cannot be overstated. Employersare in business to make money, not just provide jobs, and cannotremain in business unless they are successful. Your job will always bedependent upon the financial resources of the employer as providedand permitted to be retained by the owners.



❐ What is the probability your job will be favorably or adverselyaffected by the employer’s financial condition?

❐ Is the employer profitable and if not, when does it expect tobecome profitable?

❐ Does the employer have sufficient funds or access to funds tocontinue operating and grow?

❐ Have you studied and do you understand the employer’s profitand loss statement?

❐ Have you studied and do you understand the employer’s bal-ance sheet?

❐ Have you studied and do you understand the employer’s cashflow statement?

❐ Have you read the accountant’s opinion and all the notes in thefinancial statement?

❐ If any have been prepared, have you received and studiedcopies of the employer’s business plan, private placement mem-orandums, or budgets?

❐ By reviewing the financial history of the employer, what favor-able or unfavorable trends are discernible?


CHAPTER 4

Ownership

Greed trumps compassion

Owners are investors. Our economic and legal system empowersowners and those in control of an organization to determine its fateand the jobs of the employees. Their actions and objectives are moti-vated by self-interests that hopefully coincide with their employees’welfare, but disastrous consequences for employees are always pos-sible. Regardless of outcome, the impact upon employees is seldoma primary factor in the major decisions of owners, although mostwould prefer their employees are not harmed and even benefit. Thereare owners who occasionally place employee welfare ahead of per-sonal financial gain, but your career decisions will be better if youassume your employer is not the compassionate exception. It isalways a mistake to underestimate greed. On rare occasions em-ployee rebellions or concerted action by labor unions can delay anowner’s decisions, but these are usually only delays of the inevitable.Accept the fact that owners have different but very legitimate objec-tives than employees and nearly any actions are permissible in thename of “enhancing shareholder value.” The primary objective ofowners of for-profit businesses is to receive a return on their invest-ment through direct compensation, dividends, perquisites, apprecia-tion of their investment, or any combination of the four. Theirfallback objective is to minimize their losses should their investmentprove unsuccessful.

MOST EVERYTHING IS FOR SALE

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

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a subjective exercise and far from a precise science, giving buyers andsellers the opportunity to have widely varying opinions of value. Anowner may have no immediate plans of selling but when an offer atan attractive price is presented, a deal is struck. Most owners do in-tend to sell eventually, but a valid offer may accelerate their timing.To illustrate investor rationale, consider your own reaction if you hadbought 100 shares at $10 dollars of a growth stock that you plannedto hold for five years with the expectation that the per share pricewould grow to $50. If you were then offered $30 dollars six monthsafter your purchase, you may change your plan. Liquidity is anotherinvestor objective and owners of large blocks of stock in public com-panies may be restricted from selling. Owners of private companiesare always restricted so when an opportunity is presented to sell, theprospect of liquidity is an added inducement.

Investors invest to make money and not lose it but some invest-ments do turn bad, confronting the investor with unpleasant deci-sions. Should he sell out and take a loss? Should he hold on hopingfor improved performance? Should he invest more money to help thebusiness survive and protect the original investment? Venture capitalfunds are continually confronted with this last question, and the evi-dence indicates that many are choosing to take their losses and notrisk more. If you are evaluating an employer whose major investorsare venture capital funds and additional financial support is ex-pected, you should be cautious until you’re certain the support willbe forthcoming. Regardless of optimism and rosy projections of amanagement 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 busi-nesses or institutions are the welfare and perpetuation of the wholeorganization rather than the careers of individual employees. Theself-interests of trustees and directors of nonprofit organizations areserved well through personal compensation augmented with publicrecognition, status, personal satisfaction, and the opportunity to cul-tivate friendships. There are for-profit businesses with many share-holders, none of which own enough shares to influence the course ofthe institution that has control characteristics similar to the non-profits. In these cases, usually an entrenched, generously compen-sated, and self-perpetuating board of directors controls and makesmajor decisions. In both profit and nonprofit organizations, thepresident or CEO, who may or may not be an owner, is charged withrepresenting the best interests of the shareholder owners.


CHANGE OF OWNERSHIP

An ownership change has the potential to drastically modify oreven eliminate your job as well as to create exciting new opportuni-ties for you, unthinkable under the previous owners. Owners cangrow a business, divest of their ownership, shut down and liquidatethe business, replace management, change the direction of the busi-ness, relocate the business, or sell the entire business if they choose.Ownership entails the right to select management, set the overallphilosophy for conducting operations, and instill a style of conduct.They can provide brilliant direction, benefiting everyone or makegood intentioned but foolish decisions that cause failure. In short,they can do whatever they please, restrained only by personal ambi-tions, market pressures, the legal system, and economics.

Most, but not all, owners recognize there is a limit to the amountof cash and other assets that can be extracted without serious dam-age to the enterprise. As potential employees learn of an employerwith research and direct interviews, they are evaluating the result ofthe prior and current owner’s activities and must decide if it is ap-pealing. Applicants tend to be forced to make their employmentdecisions largely on the basis of today’s conditions and the persua-siveness of the people they meet. What they may not learn are thepresent owner’s unannounced objectives, the probability of a changeof ownership, and when it will happen. Consequently, an applicantmay have to speculate and make informed estimates on the basicownership question: “How stable is the present ownership andwould my job be affected with a change of ownership?”

PRESENT OWNERSHIP AND CONTROL

To answer the basic ownership question, you must first learn whopresently owns or controls the business and what is their level of in-volvement. Ownership and control are obvious in many businesses butvery difficult to determine in others. Owners who are directly involvedin the management of the business can easily be identified by employ-ees and during interviews. Their name may even be found in the nameof the business, but this is not proof that they are in full control. Gen-erations subsequent to the founder may find their control fragmentedor disputed because of family quarrels or dispersal of shares.

Founders of a business who remain active in management are eas-ily identified if the business has enjoyed success. They may have

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become public figures subject to frequent media interviews. If thebusiness has experienced prosperity in the past but is now deterio-rating, the founder is probably avoiding requests from media forinformation on the business.

Businesses owned by corporations may have several layers of cor-porations between the employer in which you are interested and thecontrolling parent and its owners. Partnerships and joint ventures haveowners in control and, like all owners, they can be active or relativelypassive when satisfied with the results. Nonprofit corporations andfoundations may not have individual owners, but in all cases someindividual (or a group) is in control that selects a CEO to representtheir interests. Your task is to identify those who have ultimate controlof the organization and the power structure through which control isexercised. Should you become employed, it is all the more importantfor you to be aware of the owners who can affect your career.

During your interviews, it is quite proper to inquire about the own-ers and their role in day-to-day operations as well as their knownobjectives. These are not embarrassing or difficult subjects and mostinterviewers will welcome the discussion. You can be certain yourinterviewers are even more intensely interested than you in who con-trols the business and the probability of change. You may be able tofind ownership information in advance of your interview, enablingyou to ask more specific questions. Public companies are required toissue with their annual reports to shareholders proxy statements nam-ing major shareholders and the number of shares each owns or con-trols as well as the names of the directors and officers and theirshares. Proxy statements are submitted to the SEC and are availableover the Internet. Proxy statements also contain compensation infor-mation on officers and directors as well as descriptions of stockoption plans and other supplemental benefit programs. Public com-panies are usually not as quick to give out proxy statements as thereare annual reports so you may have to request a copy or use theInternet. This information is essential for anyone applying for a sen-ior position and negotiating a compensation package.

Dun & Bradstreet (D&B) reports usually contain accurate infor-mation, including brief background material but not compensationdata on owners, directors, and officers. The reports contain financialand historical information and are written primarily for credit pur-poses, but it is all data an applicant should know. D&B reports canbe secured directly from the company for a fee or illicitly fromfriends in businesses or institutions that subscribe to their service.


THE OWNER’S OBJECTIVE

More difficult than identifying owners is the challenge of fathom-ing their objectives and how your job could be affected. Unless theirplans are disclosed publicly, they are obvious because of current ac-tions, or they are willing to confide in you, you may have to settlefor your own informed guesses. You should also assume owner’splans, like everyone’s, are subject to change when new facts or cir-cumstances appear. You have to ask yourself these questions:

What difference would any probable changes initiated by the presentor 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 ifyou plan to remain with an employer for an indefinite period of time,the odds are extremely high an ownership change will occur, affect-ing control of the business.

EXIT STRATEGY

Ownership and control change can result from factors no one canmanage or influence such as death, illness, and old age. Some of theseinvoluntary 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 withthe phenomena of “exit strategy.” Every applicant who expects toremain any length of time with an employer should be aware of thepotential impact of an exit strategy upon the business. Exit strategyis simply the agreed method and time when owners and investorsanticipate selling their interest—cashing out. This can involve takingthe business public through an IPO (initial public offering), using in-ternal funds or refinancing to buy out investors, selling the business,or merging with another. Any of these approaches can have a majorimpact upon the business, and concern for employees are secondaryin the process. An exit strategy may be written and precise or only ageneral understanding, but you can be certain one exists if the busi-ness is relatively new or has been financed by venture capitalists,

OWNERSHIP 57

investment funds, or similar groups. Business plans proposing newbusinesses, seeking investors, or supporting requests for privateplacement funding all contain a proposed exit strategy for theinvestors. Typically, the projected time for exit is four to seven yearswith five being the most common. An exit strategy component is es-sential to interest investors because few, if any, want to see their moneytied up indefinitely.

Leveraged buyouts (LBOs) are assembled and negotiated with anexit strategy for nearly all of the participants. Leveraged buyoutsinvolve a business borrowing money from financial institutions,funds, and investors to purchase the shares of the existing share-holders. Usually the investors include management. The result is thatthe investors control the company and the company incurs debt tobe retired from future profits and disposition of assets. If all goesaccording to plan, the debt will be paid off and the investors willown the company for which they invested a relatively small amount,and the company will be sold or taken public at a huge profit. Dur-ing the period when debt is being retired, the company may be con-tinually short of cash with which to operate because debt repaymentterms are too severe. Necessary reinvestment in the company is cur-tailed, mortgaging the future. A change of ownership and manage-ment becomes nearly inevitable. Applicants who learn that theemployer has undergone a LBO should be very cautious.

Investors or owners exiting can have a wide range of effects uponyour job with as many desirable as undesirable. You should attempt toevaluate the probable result because of possibilities varying from noeffect to your becoming unemployed. As a general rule, the lower yourposition in the organization, the less chance your job will be affected.You have a job because the organization needs you to function, and itrarely is in anyone’s interest to destroy the business. Senior positionsare at greater risk because they are more exposed to differing stylesand philosophies that could result from a change of ownership.

The exit of investors and replacement with new owners may havean extremely positive impact upon the organization. The departureof unpopular owners and executives and their unsuccessful programsis welcome unless their replacements prove they are even worse.Debilitating fights for control may finally be resolved. Time con-suming second-guessing and demands for information by investorsor their director representatives can free management for more pro-ductive activity. Obligations to investors may have been a financialdrain upon the organization, retarding its growth. The new owners


may very well have an agenda and the capability to successfully growthe business that could add excitement and opportunity to your job.You may be satisfied and comfortable with your present owners, andunder those conditions it is natural to assume a change of ownershipwould be harmful. Premature conclusions of adversity are a mistakein the absence of alarming evidence, such as if a new owner has arecord of stripping companies of their assets or firing personnelindiscriminately.

INDICATIONS OF PROBABLE OWNERSHIP CHANGES

There are indicators suggesting a high probability an ownershipand management change will occur in the near future. Should you beearly in your career and have thoughts of remaining with a companyyour entire working life, then you should realize there is a near cer-tainty you will experience one or more ownership and managementchanges. However, your immediate concern is an ownership changeprior to a time you plan to change employers. Ideally, throughoutyour career, you want to be the one deciding when to change jobsand not have this be your employer’s decision. The five indicatorslisted simply are ones for which the odds are high that an ownershipchange may occur, but it is uncertain how or when the change willoccur and the degree to which your job will be affected, if at all.

1. Owner’s Age. Most new company start-ups have youngfounders and owners with no intention of managing the busi-ness forever. Their objective is to create a successful business,either go public or sell out, and become financially independ-ent in the process. Their plans do not include growing old run-ning the business. At the other end of the spectrum are theolder owners into their fifties and sixties who are looking foran opportunity to sell their businesses because they no longerenjoy the activity, want more time for other pursuits, or realizethey must begin estate planning.

2. Portfolio Companies. Companies that are only one of manyowned or controlled by a parent holding company or an invest-ment fund are always subject to being sold or merged. As a gen-eral rule, the more diverse the companies held, the greater is theprobability they will be sold. For organizations in control, thesecompanies are investments to be held or sold, similar to the wayan individual would look at the stocks he owns. The individuals

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in control are usually so far removed both geographically andpersonally from the employees of the owned companies thatimpact of a sale upon employees is irrelevant unless employeereaction in some way could adversely affect a sale.

3. Disputed Control. Whenever there is a conflict in progress orcontrol is threatened, you can assume the business is in an un-stable condition. The disputes are primarily for money andpower but commonly involve differences on how the businessshould be operated, retained, or sold. These disputes are usuallybitter and the management personnel who sided with the losingfaction have little chance of remaining employed. The odds arehigh the business will undergo major revisions regardless of theoutcome, with the winners now in position of having to provetheir policies as superior. Usually fights for control become pub-lic knowledge and employees, including interviewers, are wellaware of the dispute. In public companies, the differences areaired in newspapers and at shareholder meetings at which timeone faction may emerge victorious—for another year anyway.

4. Substandard Financial Performance. The owners of businesseslosing money or performing financially below others in theirindustry are unlikely to tolerate the condition indefinitely. At aminimum, management changes are probable and the owner’scontrol position may be jeopardized in the absence of improve-ment. In our competitive economic system, substandard per-formance is unacceptable, and identifying the cause or whoeveris to blame will not help employees adversely affected. Compa-nies in or near bankruptcy have such a problematic future thatemployees or applicants should be realistic and assume all jobsare of short duration. Distressed companies may recover but theturn-around is often painful and a high-risk situation for em-ployees. Recognizing and accepting the risk may be an oppor-tunity worth taking if the potential rewards are promising. Jobsof this type are definitely for younger people or the unemployedwithout alternatives.

5. Up for Sale or “In Play.” If the business is openly up for sale, youcan be fairly certain an ownership change will occur but whetherit will be for the better is unknown. During the sale period,operations may become difficult, with present owners concen-trating on a sale and not on long-term programs to benefit thebusiness. They may actually engage in activities to strengthenimmediate earnings and improve cash flow in an effort to justify


a higher price, but in doing so they may damage long-termprospects. Unfortunately, unrealistic and overzealous expensereductions may be part of the buyer’s program and this involveselimination of jobs and more turmoil. New owners rarely arecontent to allow an acquired business continue to function un-changed for an indefinite period of time, often because of debat-able convictions that they possess superior management skills.Buyers are usually looking to the period of their ownership as anopportunity to implement their ideas and to grow the businessto maximize their return on investment.

PERQUISITES OF OWNERS

Owners are free to extract whatever funds and benefits they wishfrom a business and are only restrained by an awareness of the factthat too much can “kill the goose that laid the golden egg.” Unfor-tunately, some owners do extract too much from the business and ifthey do not kill the goose, it is severely crippled. Owners want totake as much as possible or what they need from the enterprise in amanner that will keep their tax obligations at a minimum. Taxavoidance or mitigation schemes are so prevalent that they havenearly become standard practice. Removal of funds or charging im-proper expenses to a business rarely can be accomplished withoutthe assistance of employees who have nothing to gain from their par-ticipation other than preservation of their jobs. Many employeeshave found themselves in serious legal difficulties because of theirparticipation in schemes to transfer assets to owners. Should you beapplying for a financial position with an employer engaged in exces-sive and dubious owner enrichment schemes, you should learn theextent to which you will be expected to participate. You then mustevaluate the risk and consequences.

You will find it difficult to generate much enthusiasm for any jobin businesses controlled by profligate owners and management com-pensated with outrageous salaries and benefits jeopardizing thehealth of the enterprise. Even in financially sound businesses, resent-ment may be present when exorbitant compensation is paid to own-ers or senior managers. You will be even more irritated with theirpersonal largesse if you believe your compensation is unfair or inad-equate. For most employees struggling to make their car payments,it is impossible to be associated with owners or managers receivingextraordinary compensation and to not be offended.

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Employees of highly centralized companies where all materialdecisions are made at the top can find their jobs extremely frustrat-ing with the decision makers unavailable because they are off enjoy-ing their perquisites. Golf outings, hunting expeditions, andprolonged vacation trips—all at the expense of the business—pre-vent timely decisions from being made. Almost every job requiresdecisions and review by superiors, and if decisions are not made ordelayed, it is certain you will soon be unhappy with your job.

Owners and employees view each other from very different per-spectives. Typically, owners look at employees as an expense (if theythink of them at all) and believe the business has fulfilled whateverobligations it may have by meeting its payroll. It has been theauthor’s experience that most owners have an inflated estimation oftheir employee’s affection toward them. Owners tend to look at thewhole business and the benefits derived from ownership. Activeowners involved in the day-to-day management of the business willbe acquainted with employees and may become respected leaders iftheir decisions are fair and reflect good business judgment. Poordecisions coupled with an unpleasant personality are conditionsemployees must accept or resign. Employees want to be treated fairlyand have their efforts appreciated by their superiors and peers. As anemployee, you must resign yourself at least temporarily to acceptingyour employer as presently constituted, its owner, and our economicsystem with all their perceived inequities and faults. Your choices areto be sullen and envious, accept conditions as they are, or look at thebounty of others as a goal for you to achieve.



❐ What individual, family, fund, or group has control of theemployer?

❐ 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 unfavor-

able 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 impor-tant to your career decisions as the company you have selected. Theevolution, growth, or decline of an industry are dominant factors indetermining the future of the individual companies that comprise theindustry. Internal trends within an industry, such as technologicalchanges or the emergence of a dominant company, can adversely af-fect the future of individual companies while the industry as a wholecontinues to prosper.

As an applicant for a position within an industry, it is essential tostudy the future of the industry in total and the trends and majordevelopments as well as how each employer may be affected. Yourinterviewers should be happy to discuss industry conditions andvoice their opinions. You work within an industry but directly for anindividual employer whose success is at least partially determined byindustry-wide events and the employer’s response to those events.Your study of an industry may convince you that your seeking em-ployment in the right industry but the wrong employer.

Employees tend to become locked into an industry with the expe-rience and knowledge gained on a job becoming of greatest value toother employers within the same industry. Another ingredient ofyour experience is the contacts and friends acquired, but their rele-vance will be diminished if you change industries. The more time youspend in an industry, the more difficult it will be to change jobs toanother industry where your skills are less attractive. If the industrygrows and thrives, your skills relative to the industry become in-creasingly valuable but if the industry declines, your skills may be of

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little value or a detriment to finding a new employer. Your associa-tion with an industry will influence the way others view you becauseof the fallacious tendency of people not in an industry to assumeeveryone within an industry has similar characteristics.

A person with mediocre ability may be carried to great heights in abooming industry while an exceptionally able person may stagnateand never achieve his full potential in a declining industry and market.An able and ambitious person in an exciting and growing industry willhave far greater opportunity to use his talents to reach personal goals.Industry evaluation requires a study of the industry and its past, cur-rent conditions, trends, demographic factors, and the challenge of at-tempting to peer into the future. Industries are all undergoingcontinuous change, some slowly and others with great rapidity, shrink-ing or growing and in some cases disappearing, but most evolving toconfront or take advantage of new conditions. Your task is to find theideal employer successfully competing in a growing industry.

INDUSTRY AND EMPLOYMENT

Precisely what is an industry defies definition and depends uponthe circumstances and similar to “what is fair” may be in the eye ofthe beholder. Take aviation as an example. For some, all aspects ofaviation may be considered the industry but for others, their indus-try is the air carriers transporting passengers, another, transportingfreight, yet others, engine manufacturers or airframe manufacturersand assemblers.

The breakdown of subspecialties can continue indefinitely. Per-haps, the only businesses that can be included with certainty in anindustry are direct competitors of the employer you are considering.Direct competitors plus alternatives filling the same customer needsshould be adequate for your definition of industry. Examples ofalternatives are e-mail competing with fax, electric cars supersedingthe internal combustion engine powered cars, adhesives supplantingmechanical fasteners, and cell phones replacing wired telephones.Another approach to defining an industry is to learn the trade showsan employer attends, the trade associations of which the employer isa member or could be a member, and the trade magazines they sub-scribe to. While the industry definition may never be precise, youshould be able to define an industry for your practical use.

There exist a variety of sources to find industry data. (See the listat the end of Chapter 2, The Employer: General Information.) The


Internet is definitely a good place to start. Trade magazines are excel-lent and can easily be identified in the reference books found at pub-lic libraries. The trade magazines with the largest circulation will bethe most helpful and a subscription will be a good investment. Youwill probably want information promptly so call in your subscrip-tion and ask to talk to an editor who probably will be a willingsource of information. Almost all industries have trade associationsthat again can be identified in reference books at your library. Con-tact the trade associations and they usually will provide or suggestwhere you can find all the information you need. The major invest-ment banking firms have analysts continually writing reports onindustries or individual companies in the industries. Reports on indi-vidual companies often contain industry statistics. Investment ana-lysts tend to specialize and monitor all the happenings in theirchosen industry and often their reports are an excellent source ofcurrent information.

INDUSTRY EFFECT DURING EMPLOYMENT PROCESS

Industries with which you have been associated will influence thedecision of an employer evaluating you as a candidate for employ-ment. Experience in the same industry will usually be looked uponfavorably as mutually beneficial. The employer can more easilyunderstand the positions you held and you should be better able toevaluate the employer and job. You should be alert to two potentialproblems when interviewing an employer who is a competitor ofyour current or a recent employer:

First, you may encounter unscrupulous employers who are moreinterested in pumping you for information than employing you.Even with honorable people the opportunity to interview a keyemployee of a competitor is too tempting to resist, even in the ab-sence of any job openings. Possible future job openings can helprationalize the interviews. If a competitor employer is seriously inter-ested in hiring you, they will be more impressed with your discretionin refusing to disclose confidential information rather than witness-ing you talk freely about your current employer.

An even more common difficulty with employment by competitorsmay be the existence of confidentiality or noncompetition agreementsyou have signed. Courts often rule such agreements invalid, but fewindividuals or future employers have the resources and determinationto engage in costly litigation with an uncertain outcome. Employment

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with a competitor could be impossible if your previous employer de-cides to enforce the agreements.

Industry stereotyping is rampant throughout the employmentprocess. It is often irrational and certainly unfair, but it always willexist and every applicant should be aware of the possibility and useit when practical to their advantage. Stereotyping is the automaticattributing of certain traits, behavior, or ability to an applicantbecause of time employed in an industry where those characteristicsare thought to be prevalent. The longer one spends in an industry,the more an employer may believe the characteristics exist. An appli-cant finds himself in the position of demonstrating he does not pos-sess undesirable industry traits or proving that he has desirable onesbecause those may be the exact traits desired by the employer. Mostindustries have an image with the stereotype characteristics of em-ployees prevalent. Bankers are believed to be meticulous with finan-cial statements, conscious of cost control but not overly imaginative.Employees of defense industry companies have no appreciation ofthe need to make a profit. Employees of high-technology companiesare so specialized and enamored with their computers that they can-not function in another environment. Employees from basic indus-tries cannot function in a high-tech environment. Of course, all ofthese generalizations are nonsense and the ability of individuals tran-scends the so-called industry characteristics. Still, the stereotype prej-udices persist throughout the business world.

Industries, like companies and individuals, develop reputationsthat remain long after they have any validity. Anyone seeking a newposition would be wise to initially disregard reported reputationsand concentrate on the companies and the possible job openings.Many of the old reputations are not justified either because theynever were totally accurate or the industries have undergone enor-mous changes. Basic industries, such as steel, mining, and automo-biles, are thought by many to be stodgy with dull jobs and limitedcareer possibilities. Technology industries are thought to have excit-ing jobs and “where the action is.” Financial institutions are highlystructured and do not encourage imagination. You are morally de-fective if employed in any of the socially controversial industriessuch a gaming, liquor, or tobacco. In all industries, their reputationsare at least partially undeserved and have many exciting high-poten-tial jobs not requiring a compromise of your principles or careeraspirations.


TRENDS AND MARKET SHARE

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 evi-dence as most trends continue. To be a trend, it must have been inexistence for a period of time, making its presence identifiable andalmost certainly well known within the industry. Trends havemomentum and a part of any evaluation is an estimate of whether thetrend is accelerating or slowing. Most industries are experiencing sev-eral significant simultaneous trends with the more important one asource of either pride or concern. The more common trends relate togrowth or decline in total revenues and profits, technology, consolida-tions, and global change. You can be certain the management of everycompany within an industry is well aware of all significant industrytrends and spends time planning how to benefit or cope with the trend.Upon identification of the presence of every industry trend, you willwant to know the effect upon the employer being evaluated. An appli-cant who has done his research and is prepared with questions relativeto industry trends and the employer’s position will probably surpriseand impress interviewers.

Industry Trend Indicators

Total sales or revenues changes for an industry represent the ac-cepted statistic on whether or not the industry is growing, shrinking,or remaining steady and stagnant. The rate of change is also impor-tant to understand. An industry with revenues growing more than 10percent a year is definitely enjoying substantial growth and has pos-itive attributes for prospective employees. Demand is increasing forthe industry’s services and products, and employers participating inthe growth should offer more security and opportunity for theiremployees. The more rapid the growth, the more jobs are being cre-ated in the industry, but growth rate may not be similar for all com-panies within the industry.

A critical question for any applicant is how the employer com-pares with the industry as a whole. A growth rate that is equal to orgreater than the industry average is definitely a positive sign, butfalling below the industry average is a warning an applicant shouldtake seriously. Employers who fall under the industry rates of growthhave problems to be identified, and whatever the steps being taken


to improve require evaluation. The most unfavorable situations arewhere an employer is oblivious to his substandard growth or ration-alizes it and plans no remedial action. If an industry records little ornegative growth, an applicant should be particularly wary regardlessof the performance of an individual employer. An industry in declineis not where you want to be if you are looking for long tenure.

Industry profits will usually correlate positively with the revenuegrowth or decline, but this may not always be the case. Profitabilityof individual employers can vary widely. Profit trends, often referredto as growing or shrinking margins, indicate changes occurring inthe industry that should be studied. The causes of significant margintrends can be extremely varied but you can be certain that executiveswithin the industry are well aware of those applicable. There is alsothe phenomenon of start-up companies, usually in the technologyand information industries that may not plan to be profitable forseveral years but have excellent job opportunities. Eventually, everycompany has to be profitable to survive, and you should understandhow and when an unprofitable company with great expectationspredicts it will be profitable. A comparison of your prospectiveemployer’s percent of profitability, both on sales and at the grossprofit level, is informative. (Gross profit is the profit remaining afterdirect costs and is a standard line item on most profit and loss finan-cial statements.) Employers with percentages consistently better thanthe industry averages are definitely doing some things well. Employ-ers with substandard profit percentages have problems and withoutremedial plans, the problems are likely to become worse.

Technological Change

Technological change is affecting nearly all industries. There aretwo broad categories of industries being affected by technology. Oneis the pure technology company whose primary business is creatingand marketing technology, such as computers, software, and inva-sive medical equipment. The other is the entire spectrum of busi-nesses engaged in selling essentially nontechnical products or servicesbut who rely upon technology to conduct their businesses. Wholenew industries are being created and others eliminated through tech-nological developments, and the task is a challenge for an applicantto predict the winners and losers. You want to be in an industry withtechnology that is causing growth and replacing older technology.


Any employer being adversely affected by competitive technologythat does not have a more advanced solution to regain market shareis almost certainly in trouble and applicants are wise to avoid. Em-ployers in the forefront of successfully developing or utilizing inno-vative technology can provide exciting job opportunities.

Consolidations

Consolidations of companies within an industry have becomecommon business practice both on a national and internationalbasis. Consolidations are the acquisition of competing companies orsimilar businesses in other geographical areas. There are two generalcategories:

1. Financial Promotion: These are designed for short-term gainby their originators. Those promoting financial consolidations(some are called “roll-ups”) argue they produce efficienciesand cost savings and create stronger businesses better able tocompete. Sometimes this is the result, but most of the roll-upshave been essentially financial plays dependent upon an IPO.They greatly benefited their originators but proved unable toproduce the earnings forecast and eventually fell out of favorwith Wall Street.

2. Strategic Acquisitions: Made by well-established companieswithin an industry usually to broaden existing product lines orto accelerate the penetration of new markets. Strategic buyersoften pay unusually high prices for companies in the belief theywill receive economic benefits not available to financial buyers.High prices can create unrealistic performance demands to sat-isfy return on investment objectives and result in excessive jobinstability.

Whether consolidation trends are financial plays or strategicmoves, they tout new efficiencies and that invariably includes termi-nating employees. An applicant considering a job with an employerin an industry experiencing substantial consolidation activity shouldrecognize the possibility of his job being eliminated. In such cases,it has become common for applicants for important positions tonegotiate generous severance benefits in the event of a change inownership.


Global Economy

The global economy is here and its impact on individual busi-nesses continues to grow. The observable trends should continue andmost predict their acceleration with no signs that any will be re-versed. Applicants should consider the impact of international busi-ness activity on the industry as a whole and the individual employerwith two primary questions:

1. Are sales revenues of products or services to international cus-tomers increasing or decreasing?

2. Are products or services provided by foreign competitors erod-ing the business of domestic suppliers?

Answers to those broad questions can be critical to any applicant’sfuture. There is abundant evidence of the impact of foreign trade ondomestic businesses with monthly balance of trade data gathered bythe U.S. government showing the sheer magnitude. On the anecdotallevel, one can go to a department store and read the origin labels onitems for sale or visit a port and see the quantity and variety of goodsbeing shipped in and out. An employer’s ownership of foreign oper-ations or participation in joint ventures is part of the global economyissue for an applicant to evaluate because these may constitute futurejob opportunities.

Market Share

Market share is the percent of the total industry market an em-ployer enjoys. The larger the percentage, the more powerful andimportant the employer is in the industry. To have and retain a sig-nificant share of the market in any competitive industry, an employermust have products and services customers prefer. The employer mustbe doing many things well. If market share data is not readily avail-able elsewhere, an indication can be found in Ward’s Business Direc-tory that ranks companies by sales revenues for most product andservice lines. This voluminous multivolume directory is in most largelibraries. Increases or decreases in market share are of extreme impor-tance in evaluating employers because this is a tangible measure ofhow well a business is competing. Employers with growing marketshare are performing better than their competitors, and the manage-ment is probably a more competent and stable, winning team.


The reverse is true when market share is declining and manage-ment changes may be in the offing. Few companies will watch theirmarket share decline without taking remedial steps that may or maynot be successful. Market share is such an important statistic in eval-uating an employer that every applicant should learn of it and thetrend. The job opening you are eyeing may very well be part of theeffort to reverse an unfavorable trend.



❐ 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 tomake your job a challenging pleasure, or to make your life miserable.In large corporations, executives you may have only read about inthe newspapers and only know you as a statistic on some internalreport make major decisions affecting your job. Management, whichthrough its authority and responsibility to assign job duties and eval-uate performance, has an immediate influence on your career. Posi-tive recommendations move your career forward, but negativeopinions or the more damaging kind that result in discharge mayhave permanent adverse consequences.

It is important to remember that management consists of peoplewith all the normal human failings, who make decisions that maynot always be wise or consistently fair, but the great majority theybelieve prudent and justifiable under the circumstances. As an appli-cant you must decide how compatible you will be with the managers,both personally and with their policies. The relationship will neverbe satisfactory unless you find the management team and your bossas individuals to respect and trust; and their decisions, assignments,and expectations must be seen as reasonable. For positive job satis-faction, you must believe your part of a winning team!

IT STARTS AT THE TOP

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

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the operations of the entire organization and motivating the team.Usually, there is little conflict in responsibilities because running asuccessful business is in the best interest of the owners, but there aretimes of conflict when owner interests will prevail. For employees theCEO is the ultimate decision maker on all matters, sets overall poli-cies, establishes the direction of the enterprise, and represents theorganization to the public. The first responsibility of executivesreporting to the CEO is to carry out the wishes of the CEO, and theirtenure and careers are as dependent upon the wishes of their superioras every other employee is dependent on his superior. As an applicantyou may or may not meet the CEO, but you can be certain the indi-viduals and organization you observe do reflect to some degree thewishes of the CEO. Ask your interviewers to describe the CEO andhis style of management, idiosyncrasies, and stated objectives. If theCEO has gained public attention, read all you can find in the tradeand business press.

The CEO has such power over an organization that his or hercharacteristics and programs are unavoidably a major part of anyemployer evaluation. The CEO’s reputation and influence is so pro-found that in many cases whomever is the CEO will control yourdecision to accept or reject a job offer. Two extremes illustrate theimportance of reputation, accomplishment, and public perception.

Mr. Walsh, the retiring CEO of General Electric, has been nearlydeified in American business and the company has become a modelfor others to follow. “Chain saw Al” who was CEO of Sunbeam,until fired, demonstrated the terrible effects a CEO can have upon acorporation whose name and products had been respected through-out the world. With the CEO of such importance to the organiza-tion, both past and future tenure should be considered. A CEO whohas been in the position for a number of years will have made his im-pact with policies, programs, and subordinates in place. However, anestablished, successful CEO has to be planning his succession andwill usually make every effort to promote someone from inside theorganization to continue present policies. A new CEO, and particu-larly one employed from outside the organization, will be makingnumerous changes that have yet to prove their value. Applicantsshould be cautious about joining an organization with a new CEOwith a mandate for radical change.

Much of your overall judgment of an employer as an applicantwill result from your evaluation of the management. Some membersof management you will meet face to face, and others you may only


have had described or read of their activities. You will have to drawyour conclusions based on the management as it is presently consti-tuted plus disclosed changes and those that may appear obvious,such as an executive about to retire or in ill health. However, if youare planning on a long tenure or a career with the employer, youshould recognize that management changes are inevitable. You haveno guarantee the executives that make the job appealing to you willremain in their present positions with the employer. Each is an indi-vidual with goals and aspirations unlikely to be revealed duringemployment interviews, particularly if they involve possible depar-ture. Should a change in the CEO occur, the odds are high that a newCEO will bring about numerous personnel changes. As an applicant,making estimates on the time executives will be in their present posi-tions and their probable replacements is extremely difficult, but youshould at a minimum try to do so for your immediate superior. Allmanagers, regardless of their rank within an organization, have lim-its and restrictions on their decision-making authority. At the top,the president is constrained to work within the guidelines establishedby the board of directors, overall market conditions, and the lawsand regulations governing the economy. Below the president are var-ious levels of management, performing their duties within the poli-cies established by the organization or by their superiors, and mostare aware of the limits of their discretion. Exceeding the limits ofone’s authority at any level is rarely tolerated for long, and theoffender may soon be seeking other employment.

At whatever level you are employed, someone will assign work andevaluate performance, but he will not have unlimited authority to dofor you anything you wish. The amount of authority an individualmanager has is extremely variable from company to company, withjob titles often more misleading than illuminating. As an applicant,knowledge of the scope of your immediate superior’s actual authorityas well as your own should be a factor in your employment decision.

MANAGEMENT ORGANIZATION

The management organization or structure is the arrangement ofpersonnel by reporting relationships to establish lines of authorityand responsibility for segments of the enterprise. Job titles are usedto indicate an individual’s rank in the total structure and the mostcommon basic terms, in descending order of rank, are director, pres-ident, 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 execu-tive or followed by descriptive terms to indicate areas of responsibil-ity such as finance, information systems, or engineering. The title“director” can be the most misleading and may be used by someonewith powers of a chief executive or another with virtually no author-ity. 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 butparticularly in the case of a “director.”

Small employers are unlikely to have formal organization chartsfor review, but it will be obvious and well understood that all author-ity rests with one or two individuals. In larger organizations, formalorganization charts are common and should help an applicant under-stand where he would fit into the organization. Equally important isto understand where your immediate superior fits into the manage-ment structure. If during your interviews the employer does not havea chart available, it is reasonable to ask for one to be sketched out.

Organization charts are extremely helpful to understand the or-ganization but they do tend to become out of date and fail to reflectrecent changes and informal power relationships. If given an oppor-tunity to review a chart, much can be learned by asking it there arechanges not reflected on the chart and why they occurred. Openboxes for which a job is indicated without a named occupant areworthy of a question. Organization charts, whether printed orsketched by hand, never tell the complete story of an organization orfully disclose the actual authority and stature of the jobs or individ-uals. A chart may show a number of individuals all on the same levelreporting to one person, but the odds are high they will have verydifferent degrees of importance. The differences may be attributed toability, length of service, importance of job performed, or even per-sonal relationships, but whatever the reasons they exit.

These differences are particularly important when evaluating a jobwithin a group reporting to your potential boss. You need to knowyour peers’ areas of responsibility and how you will fit in to be suc-cessful on the job. Ideally, you should also learn where your bossranks with his peers because his stature can influence the potential ofyour job. Fathoming the informal organization prior to employmentmay be delicate and difficult but is of particular importance to appli-cants for management positions. You can be certain you will becomeaware of it very quickly after starting employment, either to yourpleasure or detriment.


To accomplish the objectives of the enterprise, management con-structs organizations both to accommodate the needs and abilities ofindividuals and to solve perceived problems. Most often the structurehas evolved recognizing the skills of available personnel and the needsof the organization rather than being the product of master planning.Applicants should be wary of jobs found in new master-plannedorganization structures because they often are unproved and unsta-ble. The causes of the reorganization and the executives who pro-moted the changes should also be identified. Applicants should beconcerned with employers who claim to have put in place totally newand innovative structures; they have a low probability of success.

While there are endless varieties of organization structures toaccommodate employer needs and most work well, there are somebasic principles of organization that, if violated, are warning signs toapplicants:

• Lines of authority should be clear and responsibilities should beidentified and not overlap.

• An executive can only effectively manage a relatively smallnumber of people. Some argue the maximum number is as lowas five or six, and any number over ten except for routine low-level jobs may not be practical. You should be particularly con-cerned if your new boss has an excessive number of employeesunder his supervision.

• Everyone understands the structure and, if kept a secret, youshould discover the reasons for this.

• Multiple reporting relationships rarely survive long term. Anemployee assigned to report to two superiors, although one maybe described as a “dotted line” relationship, is placed in a verydifficult position.

• Closely related functions should be grouped together and thereis a logic to the overall groupings.

Organization Change

Organizations are always in a state of change, some very slowly andothers with great rapidity. Increases or decreases in the overall size ofthe business are the most common causes, but most are also undergoingtrends either toward centralization or decentralization of decision-making authority. Few employers are totally centralized or decentral-ized but are evolving in one direction or the other. The simple reason

MANAGEMENT 79

for the movement is that management usually finds that in time nei-ther extreme functions well and begins moving in the other direction.The best tangible evidence for larger employer’s present state is thesize of the corporate staff. A very small corporate office would indi-cate a decentralized business while a large staff would constitute acentralized organization attempting to maintain close control andprovide services to operating units. Your task as an applicant is to beaware of these highly probable trends and discern how your job andcareer could be affected. You may not want to be on a corporatestaff if the trend is to decentralize or in a subsidiary where you haveto check a policy manual or request approval from someone in thecorporate office before you can act.

Beware Organizational Fads

Organization changes mainly are a healthy recognition and reac-tion to new conditions or efforts to solve problems and not based onideology. Beware of organizations undergoing or that have under-gone recent radical restructuring as a result of management becom-ing convinced by consultants to install some fad or because a CEObelieves he alone has discovered the ultimate in organization struc-ture. Organization fads come and disappear but usually not beforecreating instability and considerable damage to the organization andemployees’ jobs before more proven structures are restored. The re-structuring process can be traumatic to an organization because itinvariably involves eliminating jobs and reassigning responsibilitywithout adequate knowledge of the work performed by the incum-bents. For an applicant to accept a newly created position in an un-orthodox new organization structure is a very risky move indeed.

Turnover

Organization structures may have changed little in years or maychange frequently, but another form of instability evidenced by con-stant turnover of executives may exist. Some turnover is bound tooccur because of retirements and deaths, and if the business is highlysuccessful executives may be recruited away with lucrative opportu-nities. One of the best recommendations for any employer is that ithas a problem with employees continually being contacted to acceptattractive positions with other employers. However, turnover byemployees because of “policy differences,” dislike of certain execu-


tives, or impossible job demands is turnover of the type that is awarning to any applicant. Never assume you will be an exception be-cause you are smarter or more clever than those you are being askedto replace.

YOUR BOSS

The most important executive for you is the executive who will beyour immediate superior: your boss. The opinion and impressionyou have of the individual who will become your boss will be amajor factor in your decision to accept employment and the level ofenthusiasm you have for the job. Ideally, you want a boss who takespride in helping subordinates grow, supports their progress in theorganization, gives them full credit for their accomplishments, and isnot self-promoting to their detriment. Regardless of how much youneed a job and how much you like other aspects of the employer, youwill find yourself in a most unhappy situation if your boss is per-sonally offensive and has an unbearable style of managing. Your jobdecision will largely result from information conveyed by peopleactually met during your interviews, and none is more importantthan the person you would report to if employed. Information con-sists of hard facts such as location and salary, but the subjectiveimpressions consisting of your opinion of the people are equallyimportant. You simply want to work with and for people you canrespect, learn from, and who are a pleasure to know. If you have theopportunity to ask former or present employees who worked foryour prospective boss their opinions, by all means do so. Theirinsight may be the deciding factor in your decision to accept or rejecta job offer.

You would like to know how long your boss will remain in hispresent position, but it is unlikely you will be told and the boss isprobably wondering that himself. You may be thrilled when a topexecutive offers you a job to work under him where you can demon-strate your talent and learn. However, the odds are not good thattruly outstanding executives will remain in their present positions forlong periods, and you may soon find yourself working for a newboss with whom you must start over developing a rapport. The otherextreme is the executive who has been on the same job for years.Your chances for rapid progression are usually limited under thistype of manager, but if you are comfortable with a steady job, thismay be for you.

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A symbiotic relationship between a boss and subordinates prevailsand can greatly benefit both or be harmful. Your superior wants youto fully perform your job assignments in a manner that does not cre-ate problems or in any way reflect adversely upon the operations orits management. There should exist an unwritten understanding thatin exchange for performing well on the job and doing everythingpossible to assist your superior, you will receive additional compen-sation and be recommended for promotions. In short, you shouldhelp make your boss a star and he will do the same for you. To helpyour boss be a star, it is easier if you sincerely believe he is one andcan be so viewed in the organization. Unfortunately, most managersare 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 promotionsand will have brought with him to each new job employees who pre-viously performed well for him. Another form of coattails is whereemployees are promoted throughout the organization because of thestature of this executive and the weight of his recommendations. Suchan outstanding executive takes pride in helping others move aheadand at the same time creates a group of individuals beholden andloyal to their mentor. To assist subordinates, the superior must havestature whereby his ideas and recommendations are seriously consid-ered. From an applicant’s viewpoint, the more stature and clout yourboss has, the better. Outstanding executives tend to surround them-selves with exceptionally able subordinates, further enhancing thedesirability of working for a winning person. Some indications ofstature may be evident before employment or a matter of reputationthat eventually will be verified or found unwarranted.

Perquisites, behavior, and attention received from other executivesare indications of an executive’s stature in the organization. The sizeof an executive’s office, its location, and the quality of its furnishingsin comparison to peers are obvious status indicators. Location isimportant not only from the desirability of the view but proximity tothe CEO or other senior officers is a favorable indication of status.If you find your boss has a very low status office, you can safelyassume yours will be worse. The desirability of parking assignmentscan often be a status indicator. In public companies, you can checkthe proxy statements to learn the compensation of senior executivesand stock options granted as an indicator of their relative status.Total compensation, while not 100 percent reliable is the best tangi-ble indicator of an executive’s overall status and rank in the organi-


zation. Once employed, you can observe with whom your boss eatshis lunch. The status of luncheon companions is often an indicationof status because individuals of relatively similar rank and statustend to associate. Should there be an executive dining room or cafe-teria, the status phenomenon will be obvious. Daily evidence of sta-tus is the rank of executives who visit your boss’s office or call yourboss to their offices. The interaction between executives where youcan observe who receives attention and who is shunned is an excel-lent indication of current status.

NEPOTISM

Nepotism is a common condition to recognize, accept, and adjustto that cannot be categorized as all good or bad. Nepotism isfavoritism for relatives and close friends of owners and senior exec-utives and not confined to privately held businesses. If you are a ben-eficiary of nepotism, then it is a negligible problem other than todemonstrate you can perform your job as well as anyone else. Thehallmark of nepotism is the selection of employees for jobs becauseof their relationship rather than ability as compared to others quali-fied for the jobs. Of course, many selected through nepotism can per-form very well. Not only do they enjoy the advantage of being placedon the job without effort; they will move up in the organizationahead of others and have access to their mentor. The sons or daugh-ters of the owner or CEO clearly have advantages over all others. Ifnepotism exists in an organization, job applicants should recognizeits presence and the fact that it will remain and that there is nothingthey can do other than accept it. You have to evaluate how it willaffect your ability to perform your job and your opportunity for pro-motions. Do not have any illusions that you can resist or overcomeits effects.

Nepotism is most prevalent in family-controlled corporationswhere there is a son or daughter or very close relative being groomedto take greater responsibility and eventually become CEO. The pres-ence of family members can preclude ambitious and talented em-ployees from ever reaching top jobs, but they can provide stabilityand continuity that isn’t all bad. Political infighting for a senior posi-tion is pointless when it is certain a family member is slated for theposition. The effects of nepotism can be extremely varied, and eachcase has to be considered individually with much depending on thecompetence of nepotism’s beneficiaries. If you are not concerned

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with promotion to senior positions, then your main concern is thatthe next generation does not consist of fools. A brilliant young exec-utive being trained by a successful parent to shoulder responsibilitymay benefit all employees.

TRAINING PROGRAMS

Management training programs present a problem for the appli-cant in that often at the time of entering the program, the manager towhom you will be assigned after completion of the program cannotbe identified with certainty. This is usually a risk well worth takingbecause your employer will have a significant investment in you thatcan only be recovered if you remain with the organization. You havebeen trained because the employer needs you. If you do well duringthe training program, it will be to the assigned manager’s advantageto help you continue on a “fast track.” Those entering training pro-grams must base their employment decision on an evaluation of theemployer, the senior management, and the possible jobs upon com-pletion of the program. Other indicators of a desirable program arethe time and money dedicated by the employer to the program andwhat happened to the prior graduates. If at all possible, you shouldtry to talk with others who have gone through the program.

LIMITED EXPERIENCE MANAGEMENT

Managers with limited or no experience are a serious and contin-uous problem for both employer and employees. Employers dependupon management to operate the enterprise in the most productive,efficient, and friction-free manner possible, and every owner andemployer prefers to have outstanding management. Employees wantmanagers they can respect and admire. Unfortunately, exceptionallycompetent managers are always in short supply and employers areforced to use many inexperienced and mediocre managers that cre-ate difficulties for both the employer and the employees. Manage-ment skills and techniques can partially be learned from the manyfine books on the subject, courses, and training programs but it takesactual experience in managing people to become proficient in man-agement. Employers seeking managers for open positions acceptapplicants with a record of managing people. Investors consideringinvesting in an enterprise evaluate the quality and experience ofmanagement as a primary criterion for their decisions. Often in start-


up or relatively new companies investors require experienced seniorexecutives to be employed before they will invest.

Larger more mature enterprises recognize the problem anddevelop means to train and develop inexperienced managers. Formaltraining programs, continual advice and guidance by proven seniorexecutives, and intervention by human resource professionals to re-solve conflicts all contribute to the evolution of inexperienced man-agers into successful executives. In larger organizations, managersare far more subject to review by superiors and educated on govern-ment regulations and organization policies defining employee rights.As an applicant, your chances are probably better in a larger organ-ization of having a reasonably competent superior, but there is nocertainty. It is never improper to ask your potential boss about hisbackground and how he learned to be a manager. Starting with theflattering assumption that he is a proven manager, he probable willtell you the story of his life.

In smaller businesses, few if any of the management support func-tions and services found in larger enterprises exist and the odds aremuch greater of encountering an unbearable boss. The CEO may bea brilliant inventor or the creator of a promising new business con-cept but has had little or no experience in managing people. Inexpe-rienced managers often become enamored with unorthodoxmanagement techniques that only bring turmoil and misery until dis-carded. Probably the most serious void in management developmentin small companies is the absence of a review system, leaving man-agement education to the infamous school of hard knocks. Learningwhat works by trial and error is often costly and an expense newbusinesses can ill afford. For an applicant evaluating a position in asmall company, it is most important to become well acquainted withthe owner or management prior to employment. Time spent withmanagement should help you learn of their quirks and strengths andalso build the rapport necessary for success if employed.

Consultants

The presence of consultants creates questions for both applicantsand employees and their influence upon management and the truepurpose of their activities is a matter of concern. Your question is,how could the result of their activities affect your job? Consultantsare individuals or organizations retained for a limited engagement bysenior management to study, investigate, and recommend solutions

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to perceived problems or install new programs and systems. Theirpresence is evidence that the CEO has been persuaded the organiza-tion has problems requiring resolution and there are not internallyemployees with the necessary skills or time the consultants purportto possess. Occasionally consultants are retained to support prede-termined conclusions that management knows will be controversialwith employees. Consultant’s recommendations almost always re-quire change and the changes often affect the jobs of employees.Their assignments usually are to provide advice believed to benefitthe organization as a whole and the owners with a secondary regardfor the impact upon individual employees.

Consultants retained for organization studies or strategic planningare of greatest concern for employees because their recommenda-tions, if accepted, have the most probable potential for dislocation ofemployees and changing the content of existing jobs. Sweeping reor-ganizations, discontinuance of products, services or entire businessunits or the starting of new endeavors cannot be accomplished with-out affecting employees. Some may benefit but more may be un-happy with the changes. Consultants are expensive and they knowtheir cost must be offset by the value of their recommendations.

Consultants retained to install new systems and technology usu-ally have the opportunity to affect only the employees and not theentire organization. Consultants providing programs designed tomotivate or train employees often are controversial but seldom dam-aging to an individual’s career unless employees are too vocal withnegative opinions.

There is no question that consultants have provided valuable man-agement assistance to many organizations but their successes oftenhave not received as much public recognition as their failures and in-discretions. They have been in the forefront of introducing new con-cepts and theories that proved to be of limited value and are lookedback upon as discarded fads. Examples of controversial programspromoted by consultants during the 1990s are reengineering andInternet ventures that at a minimum were premature. Another diffi-culty is the absence of uniform standards resulting in extreme differ-ences in the competence and professionalism of consultants. Anyonecan declare himself or herself to be a consultant and attempt to selltheir services. Presenting oneself as a consultant during a periodbetween jobs or while seeking a new job is an activity that has meritif one has marketable skills. Jobs with prominent and respected con-


sulting firms are well compensated and constitute great training byproviding a diversity of experience in a short time.

Knowledge of the individual members of the management teamand the organization will not only be an important part of your eval-uation but will prove to be valuable if you accept employment. Onceon the job you need to know who will make decisions, who can notmake decisions, who do you need as friends, who must you avoidoffending, and the host of other interpersonal factors that are essen-tial to your success. Understanding the management structure willenable you to better evaluate the job.

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❐ What is the overall performance record of the employer’s man-agement team?

❐ Who is the CEO and what is his reputation as an executive andperson?

❐ How long has the CEO been on the job?❐ Is the organization structure relatively orthodox with tradi-

tional 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 largeportion of your waking hours with the job. It is prudent to fullyunderstand in advance how those hours will be spent. In addition tothe hours at a work place, you will be devoting time traveling to andfrom the job and large amounts of time thinking about job-relatedmatters. The time and mental commitment is of a magnitude thatyou cannot afford to make the mistake of accepting a job that turnsout very different than you thought. Nearly everyone is engaged inwork because of the necessity or desire for income, but the require-ment for income should be satisfied with a job that is a pleasure toperform. There is ample evidence that a job an individual enjoys andis satisfied with is a job providing income the recipient believes is fairand 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 jobbefore you are asked to do so.

You always want to be on a job where the employer is better offwith you than without you. The more dependent the employer isupon your services, the greater is your job security and possible com-pensation, at least in the short term. However, employers who realizean employee is of critical importance tend to begin devising alterna-tives to reduce reliance upon the employee. Attempts to take advan-tage of perceived importance will encourage an employer to seeksolutions that reduce the bargaining power you temporarily enjoy.Regardless of how important you believe you are to an employer, youmust still work within the employer’s rules, policies, and customs. Ifall others are working long hours, so must you. If heavy travel andentertainment is necessary, you travel and entertain. If employee

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meetings are scheduled, you attend. You retain your importance toyour employer by performing your job and accepting the system.

Don’t be surprised or discouraged if you find it necessary to sortout the precise nature of a job and all its nuances. You may receivevarying descriptions of the job from those conducting your inter-views, and you must use information from all sources to determinethe true nature of the job. Professional “head hunters” and inter-viewers in the human resources department may possess excellentskills in evaluating applicant’s attributes and shortcomings but verylimited or erroneous information on the job requirements and em-ployee characteristics necessary for successful performance. Theseprofessionals have inherent conflicts of interest because their per-formance is graded upon success in recruiting and convincing quali-fied applicants to accept open jobs. They may believe that persuadingan applicant requires positive descriptions of the employer and thejob and therefore they neglect or gloss over problem areas. Don’texpect an interviewer to inform you of all the problems and every-thing wrong with the employer and the job. You will have to discoverfor yourself through questions and observations if there are condi-tions in an employer’s organization that would make the job difficultor impossible to perform. In most cases, the best description of a jobwill come from the person who will be your immediate superior, butyou should still evaluate information from all sources. Written jobdescriptions provide a general description but rarely contain completeinformation or the many nuances of any job. They can be helpful anda starting point but should not be relied upon.

You not only want to learn the precise nature of the job but alsothe background and personal characteristics an employer is seekingin applicants. It is fair and reasonable early in the interview processto ask an interviewer the characteristics in an applicant being sought.The response may prove extremely enlightening if you learn they arelooking for someone exactly like you, or the other extreme, that youdo not fit their job criteria in the slightest and everyone is wastingtime. In most cases, employers begin recruiting with ideal criteria foran applicant’s characteristics but will compromise if necessary inorder to fill the job. As a job search progresses without success,employers begin to question the necessity of all the original applicantspecifications. The employer may never find the perfect applicant sodon’t be dismayed if the initial applicant characteristics do not fitexactly. You should ask how critical in their selection process are the


desired characteristics you do not possess. Should their descriptionof desired traits fit you very closely, you will know the probability ofa job offer is good and you may have extra bargaining power.

During the process of interviewing and learning of the job and itsrequirement, you should be asking yourself if this is a suitable job foryou at this stage of your career. Will your education and experiencebe fully utilized and constitute a base from which to advance fur-ther? Is this a job you are reasonably confident that you can per-form? If your answer is “no” to these questions, then recognize yourpurpose in seeking the job is to earn income until something bettercomes along.

JOB TITLES

In evaluating any job, you must look beyond the job titles. Jobtitles can describe succinctly with remarkable accuracy the statuslevel and general duties of a job, be totally misleading, or deliber-ately designed to conceal a job’s true nature. Some high-status jobtitles are awarded as a partial alternative to monetary compensation.In all cases, a job title consists of only a few words that never canfully describe every facet of a job.

Many job titles are commonly used but the actual jobs to whichthey are assigned can vary immensely from organization to organi-zation both in content and status. The confusion starts at the top andcontinues throughout lower-level positions. A “president” may ormay not be chief executive officer (CEO) and there is a vast differ-ence. “Vice president” may indicate a position of great responsibil-ity or simply be a job of limited authority with a prestigious titlethought to be helpful in dealing with customers. Large banks arefamous for having legions of vice presidents. “Manager” is anothertitle that has come to mean very little without explanation. A man-ager could be in charge of a large enterprise responsible for hundredsof employees but in other organizations few or none. Other titlesthat are common and usually meaningless are “analyst,” “assistantto,” and “administrative assistant.” Some grandiose titles are givento employees in an effort to make them more credible with cus-tomers or others outside the organization but have little other mean-ing or value. Complicating any reliance upon job titles is thetendency 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. Neveraccept a job solely on the basis of the job title.

On the other hand, job titles and the statuses they imply areimportant for successful job performance. The job title should becommensurate with the responsibilities of the job and a title with sta-tus different than the job may be an impediment to performance.Within an organization, employees know the rank that job titlesimply and any titles above or below the actual job level create ques-tions and problems. A job title below the job level implies the em-ployee has yet to prove himself and may not have the full confidenceof his superiors. Fellow employees and people outside the organiza-tion may be cautious in their relations with this employee and notreadily grant complete cooperation and respect. A title greater thanthe job assigned implies to other employees that this employee willnot be on the job long before moving to a different higher-rated job.A new employee hired with a job title different than the employeereplaced will find other employees will want to know the reason. Ifyou are the new employee, you should be the first to know the rea-son for the change. Conclusions assumed from job titles may or maynot be accurate but the perception of others cannot be ignored.

Titles tend to identify rank and status and maintain a caste systemwithin organizations. This is particularly evident in professional andhigher education institutions, but it exists to some degree in mostorganizations. In professional firms, the exalted position is usually“partner” although there may be levels of partnership. Below part-ner are titles such as manager, senior, and associate, all designatingrank. In education, the dean, professor, associate professor, assistantprofessor, and instructor remain common. Corporations typicallyhave titles headed by president, below that vice–president, and thena wide variety of titles depending on the type and size of the enter-prise but still creating a hierarchy of titles.

The title of your position is important to you and should be amajor factor in evaluating any job. It indicates the level of the joband the importance to the organization. Wrapped in a job title is sta-tus within the organization and in your relations outside the organ-ization with your family and friends. It also influences the level ofcompensation you may expect since most organizations of any sizehave salary plans with pay ranges for each job classification or jobtitle. Your job title will determine the pay grade into which you areslotted, and to exceed the compensation maximum for the pay gradeyou must be assigned a new job and title in a higher pay grade.


JOB DUTIES AND OBJECTIVES

Jobs consist of a combination of job duties or specific tasks to beperformed and objectives to be accomplished. Lower-level positionsconsist primarily of assigned tasks with minimal discretion or imag-ination required. As one moves up the scale of responsibility, the jobcomponents become necessary to accomplish desired objectives. Atthe bottom are jobs with clearly assigned duties that are highly repet-itive and frequently involve manual activity. A production line as-sembler or word processing typist would be examples. At the otherend of the spectrum is a president with the task of accomplishingobjectives, such as increasing return on investment or developingand implementing a strategic plan for long-term growth. Nearly alljobs fall between the extremes and are a combination of requiredtasks and objectives with objectives growing in importance for moresenior positions. As an example, a salesperson is responsible for reg-ular sales contacts with customers (duties) and may have some salestargets (objectives). A sales manager’s primary activity is building,maintaining, and motivating a sales force and distribution system toaccomplish a targeted level of profitable sales (objectives). The salesmanager’s duties involve substantial discretion and are not delin-eated by superiors, but you can be certain the superiors have a voicein the sales level or objectives the sales organization is expected toachieve. The salesperson will be evaluated by superiors primarily onhow well assigned duties are performed while the manager will bemeasured more by the success in accomplishing objectives.

Job duties are essential to accomplish objectives and the two are in-separable in job performance. However, they should be separatedwhen attempting to learn a job’s content and during evaluation of thejob. Don’t assume excellent performance of the job duties will auto-matically accomplish the objectives because the objectives may verywell be unrealistic. However, you can assume excellent performanceof job duties will achieve reasonable objectives if the job duties areappropriate. An example of uncoordinated duties and objectiveswould be a staff accountant assigned the task of identifying potentialcost savings who, without authority, is held responsible for achievingthe savings. On the job, you will be evaluated both on how well youperform the job duties and the record of achieving objectives. Over aperiod of time you cannot expect to succeed by performing well inone category but not the other. A factory manager is not a success ifhe 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 safetyrecord and happy workforce that fails to meet production schedulesis 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 betterunderstand what is expected and hopefully clearly define the objec-tives. While seeking answers, remember many jobs have multipleobjectives and while not all are formally stated, they nevertheless doexist. 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 wish-

ful 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 esti-mate of your chance of job success, providing you are honest inassessing your own skills and talent. Since multiple objectives prevailfor most jobs, you should make some effort to establish an order ofimportance but not neglect any.

For many jobs, the objectives are well defined and precise, butoften they are not clear, obvious, or well thought out. A quality con-trol manager may be told defective parts must be reduced 20 percentwithin the year. A comptroller is instructed that reliable financialstatements must be complete within a set number of days after theend of each month. For others, the objectives do not lend themselvesto precise quantification but they do exist in a general way. A per-son’s objective in a training program is to learn whatever the pro-gram has to offer, impress the instructors, and be able to perform ona job utilizing the training. Young professional’s objectives are toperform well on anything assigned without complaining and impressall superiors. Unfortunately, employers often only know there is a


job to fill and precisely what objectives must be achieved for theemployee to be viewed as a success have not been thought out orwritten. In these cases, an applicant should be alert to differences ofopinion within the employer’s organization as to the job content.

Candidates for senior positions are commonly asked during theinterview process their views on attainable objectives and the timerequired for accomplishment. Applicant opinions are sought as partof the evaluation process to learn if the candidate is confident he canperform the job. Another reason is that applicants with the experi-ence to qualify for a senior job may have valuable opinions as to whatare reasonable objectives. A prudent employer will welcome an appli-cant’s opinions in finalizing the job content and objectives. Anemployer adamant in his objectives who has no interest in an appli-cant’s opinions is usually a good one to avoid. During discussions ofobjectives, applicants should guard against voicing unqualified opin-ions as to what can be accomplished because they are unlikely to pos-sess detailed knowledge of the employer’s condition or the operationsthey would manage. Applicants should be wary of being goaded intoaccepting impossible objectives in order to receive the job.

You should be comfortable with the objectives before acceptingany 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 othercompanies to indicate the objectives are possible? Are you entering asituation where the performance level of the person your replacing isknown and there are obvious changes you could make to justifyhigher objectives? Objectives could be troubling when established bya promoted or retired incumbent who was extraordinary in per-formance and set a difficult standard. Have executives without prac-tical knowledge created impossible objectives with only a vague hopethey can be achieved? When objectives appear to you to be unrealis-tic, you should question them before accepting the job. Once youaccept the job, you are accepting the challenge of meeting the objec-tives. You can expect to be continually evaluated by your superiorsand peers on meeting your objectives, particularly if objectives werea major part of your preemployment discussions.

Equally important to knowing the objectives is knowing the timeperiod in which they are to be accomplished. Time limits for objec-tives totally change their nature since many objectives could beachieved if the employee had unlimited time but they would bemeaningless and never acceptable. Conversely, objectives become

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impossible if inadequate time is allowed for their completion. A salesperson with a sales objective of $100,000 could accomplish the saleswithout any effort in one year but never sell that amount in a monthregardless of the effort exerted. A new president employed to turnaround an unprofitable business may have very limited time beforethe business runs out of cash. For some jobs, a training or break-inperiod is granted prior to the time when full performance is ex-pected. In other jobs, you will be expected to fully perform immedi-ately. You will definitely want to know the extent of any training orgrace 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 toaccomplish your employer’s objectives. Learn as many as you canbefore accepting a job. For lower-level jobs, the precise activities andtheir sequence for performance will probably be fully defined but themore senior jobs become, the less defined will be the job duties andthe sequence largely at the employee’s discretion. Senior employeesare expected to know and recognize the problems that first requireattention. Most jobs have multiple tasks, making it advisable toidentify each task and estimate the percent of your time you will bespending on each. Since some segments of the job will be more inter-esting and pleasant than others, it is best to know how you will berequired to devote your time. Few jobs are 100 percent perfect andnearly all contain some disagreeable aspects, making it important toknow in advance the time spent on both the agreeable and unpleas-ant. In learning all the job duties, you can determine if there are suf-ficient enjoyable activities and advancement opportunities to makethe unpleasant bearable. You also can decide if some of the jobduties are simply impossible or beyond your capabilities. Job dutieslike objectives can be unreasonable.

To evaluate objectives, duties, and the entire job you have to con-sider the degree of stress and pressure to perform. Your willingnessand ability to work under stressful conditions must be a considera-tion in evaluating the stress level of jobs. Stress occurs when jobsrequire constant close attention and concentration and failure to doso results in material loss or even lives. Aircraft controller is an obvi-ous example of a stress-producing job. Stress also results on jobswith very tight deadlines for completion of assigned tasks as canoccur in the media and advertising industries. Stress can result from


attempts to accomplish difficult or impossible objectives in an unrea-sonable period of time. Morale and enthusiasm for the job influencethe amount of stress employees experience. Enjoying the job andbelieving you and your associates are engaged in important worth-while activities will do much to minimize stress.

The level of dedication to perform the job should also enter intoyour thinking. How many of your waking hours are you prepared todevote to the job? Are you willing to give job-related matters prior-ity over personal activities and interests? Senior managers recognizeand come to accept that job demands have a very high priority withfamily affairs and other interest, except in crisis, having a lower pri-ority. Job candidates would do well to consider this issue beforeaccepting a job and finding themselves in constant conflicts betweenjob and family obligations.

LOCATION AND WORKING CONDITIONS

The job location has an internal and external component. Theexternal is the geographical location of the employer and outsideenvironment that was discussed in Chapter 2, The Employer: Gen-eral Information. Your internal location is where you are going per-form your job. It is the chair, desk, office, room, vehicle, workstation, or wherever you will be physically located when on the job,and if at all possible you should view it before accepting the job. Ithopefully will be more than suitable, but it could be totally unac-ceptable or even constitute an insult. The work environment shouldbe pleasant, hopefully not just adequate and conductive for you toperform the job. Your place of work should also be commensuratewith those of other employees of similar rank and status and defi-nitely not inferior. In many organizations, job classification and sta-tus determine the size, quality, and type of furniture, decorations,and location of an office. This may be formalized in a written policyor simply be the result of custom, which has the same binding effect.Parking spaces may also be assigned on a status basis and should becovered in your preemployment discussions. Any proposals for youto 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 orthe CEO is an indication of your status but equally important, itgives you exposure to those who can influence your career. Assum-ing 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 youpersonally. Many talented and deserving employees’ careers havelanguished because they were in remote locations and senior man-agement little knew them. Of course, not everyone is interested inpromotion and change so for them an isolated location is ideal.

Working at home has become more prevalent because of the ad-vances in information technology and the growing interest in flexi-ble work schedules. The possibility of working all or part of one’stime at home may have great appeal for some, but it is not alwayspractical and the opportunities more limited than the attention re-ceived in the media. Working out of one’s home appears to be moreprevalent for the self-employed and individuals working as inde-pendent contractors rather than as regular employees. In any home-work situation, there are two major problems to confront. One ishaving a suitable place or room, free from distractions, in which towork. The other is the inevitable lack of direct contact with otheremployees where issues can be discussed and being deprived ofpleasurable social conversation. Of course homework of anothervariety has always been prevalent and if you are ambitious you toowill experience many hours at home reading reports, writing re-ports, and a myriad of other activities you did not have time forduring the day.

HOURS OF WORK

No discussion of job requirements is complete without learning ofthe hours of work per week demanded by the job. For many the issueof hours required bring into focus basic questions of life style, atti-tude, diversity of interests, and overall philosophy of the type of lifeone wishes to live. Only you can evaluate the effect your hours ofwork will have on your home life, marriage, and activities you enjoy.A determination to work forty hours or less per week will allow timefor family and other interests but probably limit income and mate-rial assets. Long hours may be necessary for career goals, but theywill preclude many other enjoyable activities. You also have to askyourself if you have the physical and mental stamina to work verylong hours regardless of the immediate and potential rewards. It isimpossible to argue one approach better than another since the deci-sions are very personal for each individual. However, most end upwith compromises and accommodations in which some but not all


family life and outside activities are sacrificed. Senior managersknow and accept that their hours will be long and irregular, so thereis little to learn or discuss during the interview process. If you accepta senior position, you know you must devote whatever hours arerequired to fulfill your responsibilities. Those unwilling to spendlong hours on their job are well advised to forget any aspirations tohold high-level positions.

Before accepting any job less than senior management, learn thehours you will be expected to work and realize there are severalanswers. One is the formal answer involving the official starting andquitting time and hours per week, and the other the actual hoursbeing worked by employees in jobs comparable to yours and thehours worked by the unit to which you will be assigned? Mostimportant are the hours you will be expected to spend on the job.Never harbor any illusions that you will be able to work hours lessthan your peers or change established practices. You also must be onguard for professional interviewers who do not know the actualhours being worked or claim the present long hours are only tempo-rary 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, andflexible hours designed to attract and hold employees. Employersusing these innovations usually have businesses that lend themselvesto these practices for many of their employees, but senior managersstill work whatever hours necessary to fulfill their responsibilities.

Certain industries are infamous for requiring employees to workincredibly long hours. The professions of accounting, law, and in-vestment banking are notorious with seventy and eighty hours perweek. Technology companies commonly have employees spendinglong hours on the job. For the professionals, the long hours are cus-tomary and part of the requirements for moving ahead in the pro-fession. It is a test of the stamina and commitment thought necessaryto function in the profession, a means to increase hourly billings tocover very high salaries, and part of “paying your dues.” In technol-ogy companies, the inducement may be stock options and the possi-bility of retiring wealthy before age thirty-five. Regardless of thecareer and financial carrots, to work long hours one must enjoy andbe interested in the work. While the above are well known for theirlong hours, long hours can be the practice in any organization so youmust 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, andweekend 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 re-quired to take their vacations with the penalty of forfeiture?

• What are the holidays and particularly the days off for the year-end holidays?

• Are some employees working on holidays or is the businesstotally shut down on those days?

• Are employees working long hours given adequate time off withpay during normal hours to handle personal matters?

• Is there a program to provide compensating time off for hoursworked in excess of forty per week? Of particular importancein your questions of hours is Saturday and Sunday work.

Some jobs require long hours during the week but weekend workis avoided and rare while others continue throughout the weekend.

TRAVEL

Travel presents a special problem in evaluating a job. Before ac-cepting any job, you should clearly understand the travel require-ments 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 andfriends, but for most modest amounts of travel are enjoyable and apositive aspect of the job. However, some want no travel while oth-ers cannot have enough. Some would enjoy travel but their family


obligations make prolonged travel exceedingly difficult. You mustevaluate your attitude toward travel and make your own decisiononce you understand the job requirements. Is travel for you attrac-tive and desirable, a burden you can handle, or impossible makingthe job unacceptable?

JOB DURATION

Few jobs will last a lifetime and never assume any will. Chapter 1,The Employment Environment described many of the factors that cancause turmoil within an employer, causing jobs to end. However,there are fine jobs that are known to have a limited life and prospec-tive employees are so informed. Often these jobs are very lucrativeand are excellent stepping-stones in one’s career. It is common in theconstruction and defense industries and for foreign assignments forpeople at all levels to be employed only for the length of a project ora set time. Whenever employment is known in advance to be of lim-ited duration, severance benefits are normally discussed when em-ployed. Employment contracts covering jobs of limited durationroutinely specify the length time to be employed as well as compen-sation, benefits, and termination pay. The severance benefits are com-monly substantial and an inducement for the employee to remainuntil completion of the assignment. Often employees in limited dura-tion positions are assured by their employers that at the end of theassignment, an effort will be made to find them another position butseldom is there a guarantee. Job candidates qualified for positions oflimited duration usually are well aware of the situation and ask theright questions. If there is not a set time for termination of the job oreven a general estimate, you will have to make your own estimate.

ENTERTAINMENT AND SOCIAL DEMANDS

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

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from home. Entertaining often includes spouses who may welcome theopportunity or resist participation making it important to considertheir attitude when evaluating the entertainment aspect of a job.

Entertainment requirements may be an extremely attractive com-ponent of a job for many applicants. The prospect of eating in ele-gant restaurants and attending expensive events can have greatappeal, particularly for those who have had little exposure to the“good life.” However, anything can eventually become old and loseits charm, and in time entertaining simply becomes part of the job tobe performed. Another downside to entertainment is that muchoccurs in the evenings outside of regular working and this is timeaway from home and family. Furthermore, unless you have extraor-dinary will power, elegant dining will involve the consumption offood and beverages not considered conducive to good health.

To evaluate the entertainment requirements of the job and deter-mine 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 quiteanother to attend a so-called “gentleman’s club.” You may welcomerowdy entertainment or find it abhorrent, depending on your view-point. What will be required of my spouse and what will be myspouse’s attitude? (You better talk it over at home before commit-ting.) Answers to these questions should enable you to evaluate theentertainment obligations of the job.

SUBORDINATES

If you are evaluating a job with management responsibilities, youwill want to learn of the subordinates for whom you will be respon-sible. Information received prior to employment describing the indi-viduals and the employees as a team may be unavailable, inadequate,or inaccurate, and one would be wise to withhold your personnel de-cisions until after you meet the employees. The difficulty occurs


because senior management tends to look at the success or failure ofdepartments or larger business units as a whole and may have hadlittle or no contact with the employees under the person you mayreplace. Their opinions of the individual employees will most likelyhave filtered through and come from the replaced manager whoseviews may not have been objective. Senior management’s primarycontact will have been with the replaced manager and not the em-ployees of the unit, but their evaluation of the replaced manager caninfluence their opinion of the employees. It is all too easy to drawconclusions with the rationale that a successful manager must haveoutstanding people while a failed manager could not have done italone and surrounded himself with bad people. A new managershould listen respectfully to all the opinions on personnel given butreach conclusions only after meeting the employees and observingtheir performance under his supervision. Employees with perform-ance previously reported as unacceptable may become exceptional,fine team members with new leadership.

Every manager, upon assuming responsibility for a segment of anorganization, has to be concerned with how the employees will react tohis presence. The welcome will largely be determined by events thatoccurred prior to the manager’s arrival and circumstances not of themanager’s making. The popularity or lack of popularity of the individ-ual replaced will be a factor. Differences in management styles and ap-proaches between the new and old play a role in acceptance. If the newmanager took the job with a mandate to make major changes in theunit’s performance, there may be resistance or enthusiastic acceptance.A new manager may have full authority to discharge anyone under hismanagement and even has been advised to “clean house,” but a teamhas to be fielded until new members are employed, making it essentialfor a positive level of acceptance from the employees be established.

Anyone entering a new management position should learn theextent 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 pro-

mote employees?• Are there employees under your management with special job

security or privileges because of nepotism, long tenure, or legalproceedings?

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• What will be the review of your personnel decisions and role ofa HR department?

When evaluating a job avoid premature conclusions. Just becausea job title sounds great, don’t assume the actual job is as you hope.Just because an interviewer gives you a general description of thejob, you should not limit your questions. Any inconsistencies be-tween remarks of different interviewers, printed information andyour own observations should be resolved before starting a job. It isyour career and you need to know precisely the nature of the jobincluding why there is a job opening in the first place.



❐ Are the job duties and objectives you are expected to achievewell 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 yourevaluation and preparation to negotiate employment terms. Duringyour interviews it is reasonable and fair for you to inquire why a jobis open and not hesitate to tactfully pursue the subject. What youlearn may convince you the job is more desirable than thought orpersuade you to seek employment elsewhere. A job becomes avail-able because those in control decide a vacancy exists, certain staffinglevels are necessary or an individual with exceptional credentials isavailable and worth creating a job to take advantage of his talents.However, there are varying levels of urgency to employ anyone, andit is not uncommon for controversy to exist whether someone shouldbe hired from outside the organization. The degree of urgency influ-ences an employer’s willingness to compromise on an applicant’s jobqualifications and compensation demands. Controversial job open-ings tend to be filled whenever possible with highly qualified oroverqualified applicants because top performance may be requiredto silence critics. The employer’s urgency to fill a job for the organi-zation to function smoothly should be evaluated jointly with thequestion of why is there a job vacancy. Always important is whathappened to the last person on the job? There may be a combinationof factors and circumstances that created the job vacancy, some ofwhich are complex, others straightforward, and some reluctantlydisclosed but all worth studying. Fortunately, most fall into generalcategories for discussion purposes.

• Normal attrition such as illness and retirements.• Vacancies that are new jobs.• Vacancies caused by transfers or promotions.

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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 dis-ability, illness, retirement, or death require little study other than con-cern over how employees will accept a replacement. Noncontroversialreplacement job openings are a small percent of the total, but whenthey do occur applicants can devote their time to evaluating other as-pects of the employer and job.

Complete knowledge of why a job vacancy exists has value in pre-employment studies, but may prove to be even more important ifyou accept the job and start work. Ideally, you will be able to meetand question employees with whom you will work before starting onthe job. Employees with knowledge of the job vacancy almost cer-tainly are aware of the major factors that created the vacancy. As anew employee hoping to develop rapport with employees, you willwant from their perspective whatever information about the job theypossess. It is highly probable they have accumulated more detailedknowledge of the job than your interviewers and have a good under-standing of what has constituted acceptable performance. However,employees aware of a vacancy may not be fully informed of howmanagement views the job, its content, and the performance ex-pected of a new employee. If employees are totally unaware of thevacancy or you are being secretly hired to replace an existing em-ployee to be terminated or transferred the day before you start; avery different environment will prevail. It is quite possible fellowemployees could be hostile if the person replaced was popular or be-lieved to be treated unfairly, or if a newly created job is viewed as athreat. When a new employee arrives on a job, there is always thepotential for conflicts that largely can be avoided if one fully under-stands the situation. If the opportunity presents itself, inquire ofother employee’s knowledge of the job opening and their attitudetoward filling the job from outside the organization: Will you bewelcomed or resented?

CHANGE OF DUTIES

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


content and possibly to the organization structure. These may bechanges contemplated for some time but only now implementedbecause of the incumbent’s departure. This is particularly true incases of retirements. Jobs have assigned duties and responsibilities,but they also take on characteristics that the incumbents acquiredthrough aggressiveness or simply by default. All the personal rela-tionships the incumbent had developed during his tenure are nowgone and will have to be reestablished by the new employee. It is theideal time for an employer to add new functions, reassign others, andend those believed to be unnecessary.

NEW JOBS

New jobs tend to be created when a business is growing, con-tracting, or a need for special expertise is recognized. In growingorganizations, new jobs are created when additional personnel arerequired to manage and produce the work to satisfy customer ordersfor products or services. For these jobs, there is an obvious andimmediate need and little question as to the nature of the job dutiesor at least the job’s purpose. The jobs are without history, no incum-bents are displaced, and the workload is of such magnitude that newemployees are welcome. However, new jobs may involve splittingaway duties from present employees. Transferring of job duties al-ways has the potential for conflict because many employees, regard-less 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 growthare desirable because of their high probability of continued employ-ment and the possibility of advancement. Exceptions are employerswith cyclical or even seasonal businesses characterized by periodiclarge influxes of new employees only to be laid-off during the in-evitable downturn.

New jobs in new businesses resulting from projected personnelrequirements rather than customer orders in hand are inherentlymore risky, but they can be exciting and have exceptional potentialfor advancement and compensation. Often these jobs are poorly de-fined and the applicant hired will be given the discretionary author-ity and responsibility for setting up and establishing the job content.Start-up companies or existing companies with major expansionprograms invariably have developed detailed business plans project-ing revenues, profits, and the personnel required to accomplish the

WHY IS THIS JOB OPEN? 109

financial objectives. The business plan may also reveal the level ofcompensation the planners are prepared to pay someone for the jobyou’re considering. Applicants for key positions called for in thebusiness plan should be permitted to study the plan and draw theirown conclusions as to the validity of the concept, financial projec-tions, and probable success.

During your study, never forget that statistics indicate over 80 per-cent of new businesses fail within five years. Of course, those suc-ceeding may enjoy spectacular prosperity. The founders and venturecapital investors sincerely believe, at least in the early stages, in thesoundness of their plan and use it as a sales tool to convince attrac-tive applicants to accept employment. Applicants for less than seniorpositions may or may not be given access to the business plan butthey should ask. These new jobs are dependent upon the conceptdescribed in the business plan being feasible, the financial projec-tions being realistic, and there being adequate capital for the ventureto continue until it becomes profitable. Unless you are fully satisfiedwith all three—feasibility, financial projections, and capital—youshould be very cautious in accepting employment. The same cautionapplies to major expansion plans of well-financed, established cor-porations because you can assume that if the expansion does notmeet projections or worse, fails, it will be shut down and the employ-ees will be terminated.

Training Openings

Large established companies often have elaborate programs toemploy and train a certain number of recent graduates with bache-lors’ or masters’ degrees. The number selected is usually based ondemographic studies of the existing workforce, the projected numberof vacancies likely to occur over a long period of time, and theamount of funds the employer is willing to invest in personnel thatwill not immediately be productive. Most of those selected are notemployed for an immediate job opening but for jobs the employer isconfident that will eventually become open.

Considerable care is involved in the selection of these employeesand usually only those appearing to have senior management poten-tial are chosen. Employees selected under these programs are pam-pered, and their performance is carefully monitored by line managersand human resources personnel. They are given extra training andfrequently transferred from job to job to acquaint them with as


much of the entire organization as possible. They are on a “fasttrack” to rapidly acquire the experience necessary to accept respon-sibility for management positions. Applicants selected for these pro-grams are fortunate because the potential is so promising, althoughthey often do not know the precise jobs they will work on or whowill be their superiors. While gaining experience, they probably willbe asked to work on some jobs they find unpleasant, but they canalways look forward to their next transfer. These select employeesusually enjoy more job security during downturns because they areconsidered so important for the company’s future.

“Fast track” programs are common in companies that have poli-cies requiring job vacancies to be filled by promotion from withinthe organization if at all possible. An internal promotion policy fur-ther adds to the desirability of being selected for a “fast track” pro-gram. Internal promotion policies are popular with employees andproof of management’s convictions that they can best “grow theirown.” It all works well until there is a downturn or competitors aredoing better at which time the policy may be challenged. The largemega-mergers also disrupt the fast track program creating uncer-tainty for the participants.

Special New Jobs

Sporadic job openings do occur in companies reducing their workforce or who have recently done so. Management has learned that inmost cases when expense reductions are necessary, it is less disrup-tive to lay off employees than attempt across-the-board wage reduc-tions. However, downsizing programs often results in moreemployees departing than planned because of the inevitable instabil-ity created, controversy over the wisdom and fairness of the pro-gram, and refusal of employees to accept transfers to other jobs. Inlarge corporations where generous early retirement packages areoffered to all employees based on a formula of age and length ofservice, those accepting may include key personnel in jobs that mustbe filled. During and in the aftermath of downsizing programs, jobopenings occur and the program’s implementation may be a partialbut rarely complete explanation of why the job is open. You shouldnot hesitate to look for the full story.

New jobs are created when an employer recognizes the need foran individual with special expertise. The most common causes arethe cost of outside services, losses incurred by not filling the job, and


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, toname a few of the more common. Senior management, in the beliefthat employment of a specialist will solve a problem, authorizes jobsof this type.

Unfortunately, management’s reasoning in these situations is notalways adequately explained to the organization. Individuals em-ployed under these conditions may have difficulty securing the coop-eration of other employees in the early stages of their tenure.Recognition of the possibility of employee resistance or minimalcooperation is the first step in planning a program to properly intro-duce the new employee and service. A new employee may be forcedto devise his own program to introduce the services and secure coop-eration throughout the organization. Regardless of any temporaryacceptance difficulties, these jobs constitute an opportunity for pro-fessionals and other experts to utilize their training and establishprograms as they believe they should be conducted. In creation of thejob opening, management recognized the need and understands theobjectives, but the new employee will have broad discretion in howto accomplish the objectives.

JOBS OPEN BECAUSE OF TRANSFEROR PROMOTION

If you are evaluating a job vacated by a person who remains in theorganization, you should meet the person and seek his views of thejob. This individual can provide you with more detailed and reliableinformation relative to the job than anyone. In addition to learningof the job duties and objectives, you want this individual as a friend.Learn what assistance he will provide and the amount of continuedinvolvement 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?


• 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 becausethis person has critical background information for your decision toaccept or reject the job and can influence your success or failure ifyou do accept the position.

The person you replace is probably thought well of in the organi-zation and has established friendships with executives who value hisopinion. If he interviewed you prior to employment, you can be cer-tain he was asked his opinion and his views may have been decisivein the decision to make you an offer. You also can be certain that ifhe disapproved of you, there would have been no job offer. You canalso assume that once employed, this person will openly or casuallymonitor your performance. A recommendation to hire is a continu-ing test of the judgment of individuals who advocated your employ-ment, giving them a personal stake in your success. Those with thegreatest influence have the most at stake and you repay their recom-mendations by succeeding on the job. The person you replace is usu-ally in a position to assist you so recognize the possible mutualbenefits and make the most of the relationship.

When you replace a person promoted, you must assume their per-formance was satisfactory and possibly set a high standard for you toequal or exceed. If the promotion is to a position to become your boss,you must have a clear understanding as to what is expected. Someargue attempting to fill a job under these circumstances can be ex-tremely difficult and challenging, and in many cases they are correct.Your boss will at least initially know your job better than you andtend to believe the way the job was performed in the past was thebest way. Whatever opportunities you see for innovation or improve-ment will require tact in their implementation to avoid conflict orembarrassing your boss. The new boss may have held your job for along period of time and forgot the time necessary to become profi-cient. While you are learning your new job, your boss is learning ofthe responsibilities and problems with the management position. Hemay be enjoying the status and compensation but struggling with thejob. The demands of his job may leave little time for assistance to youand may create unreasonable performance requirements that may bedifficult to accomplish. A small risk is also present that the promotedperson may not like the new job and request to return to his old job,


displacing you. The importance of thoroughly discussing the jobvacancy created and relationship with the individual promoted tobecome your boss cannot be stressed strongly enough. Much de-pends upon the type of person the manager is and recognition byboth parties of potential difficulties but what could be a very desir-able relationship.

A desirable feature of a job from which the last occupant was pro-moted is its record as a stepping-stone for promotions. The job maybe considered excellent training and preparation for advanced posi-tions or has a high-profile for senior executives to observe the occu-pant and know personally, or hopefully have both characteristics.You will want to learn if management views the job as a prerequisitefor promotion to senior positions or simply a desirable job to be inwhen employees are being evaluated for promotion. Jobs from whichemployees are frequently promoted may not be formally designatedas stepping-stones but if they have the record, it is reasonable toassume they possess this attribute. Discovering that others, and espe-cially executives holding senior positions, have been promoted fromthe job or similar jobs should make the job even more attractive.When this is the case, your interviewers may emphasize the promo-tional aspects of the job with applicants for the position because oftheir perceived ability to move up in the organization. Question yourinterviewers 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 thejob prior to a possible promotion. For some large organizations, theactual job is not as important as its status as a stepping-stone. Spend-ing time in a particular department, at a key subsidiary, or on for-eign assignment may in some organizations be as important forpromotion as the actual job.

JOBS OPEN BECAUSE OF DISCHARGE

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


employee is fired have characteristics that may affect the replace-ment. In a perverse and irrational manner, there may be employeeswho believed the discharge to be unfair and partially blame theuninvolved and innocent replacement. You should assume, prior toemployment, that you will only learn the employer’s view of why theunsatisfactory employee was fired, and direct efforts to learn theemployees’ side could be frowned upon and jeopardize your chancesof employment. Efforts to learn additional details may be viewed asquestioning the veracity of your interviewers. Under these circum-stances, you have little choice but to fully accept the employer’s rea-sons and recognize the same standards are applicable for you. Thereare often mitigating circumstances and factors that made the dis-charge difficult and controversial, but you are not likely to learndetails until after you’ve been hired. Firings are never pleasant andthe participants often prefer to forget and not discuss the incident.

Types of Discharge

There are essentially two categories of discharge. One is commonlyreferred to as “discharge for cause” for egregious offenses. Theft, dis-honesty, violent acts, illegal activity, disloyalty, contract violations,repeated substance abuse, and open defiance of employer’s policies ordirectives are examples of reasons for “discharge for cause.” Theother type of discharge is for unsatisfactory performance, which isnot as clear-cut and often involves management’s judgment over aperiod of time rather than the awareness of a specific offense.

Unsatisfactory performance is a very broad category and not lim-ited to failure to meet job objectives or production quotas. It can in-clude personality conflicts with managers and fellow employees,unacceptable or unpopular activities outside of working hours, reli-gious proselytizing, sexual improprieties, and any other characteris-tic, activity, or practice management disapproves. Frequently, thereare multiple reasons for the discharge and while no one reason wouldhave resulted in discharge, the sum total became more than manage-ment could tolerate. These discharges are usually justified and oftenoccur only after management has accumulated a written record ofeffort to encourage the employee to change. However, some unsatis-factory performance discharges are controversial, and the reasonsgiven 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


through litigation. On occasion, discharges occur with the partiesagreeing to never disclose the reasons. The employee “resigns” anddisappears and all the replacement applicant will learn is that the res-ignation was by mutual agreement.

Discharges for Cause

Replacing someone discharged for cause, regardless of how justi-fied the discharge, does not guarantee a cordial welcome for the newemployee. Most employees understand the employer has little choicebut to discharge when an employee commits a blatant offense, al-though some may argue for “another chance” or lesser punishment.Fellow employees may have known of the discharge offenses longbefore management and are relieved that management took actionand approved of the firing. However, you have to question the de-gree to which other employees were aware of the offenses and pos-sibly involved. You should be particularly skeptical if only thedischarged was blamed when the offense was theft, dishonesty, orother acts that had serious financial impact on the business. It is verydifficult for any employee to be involved in improprieties over a longperiod of time without other employees at least having some suspi-cion. As examples, financial executives may be fired for “cooking thebooks” and serve as scapegoats, but others almost certainly knewand condoned the activity. Or, a controversial design incorporatedinto a finished product that results in accidents was surely obviousto others. You can assume that in cases where other unidentified em-ployees were involved, they will not be pleased to greet the re-placement. Fortunately, these situations are rare and usually when anemployee is discharged for cause, other employees are pleased to seethe offender gone and to welcome the replacement.

Unsatisfactory Performance

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


• 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 bene-

fits paid?

A discharge may have been proper and possibly long overdue ineveryone’s opinion, creating the question of why management de-layed. Some may not be for obvious causes and the justification maybe controversial but probably less so when all facts are known. Theworst cases are management’s failures, starting with employment ofa person unsuited for the job or by demanding impossible perform-ance. Any applicant who learns that the last two or more holders ofthe job were fired for unsatisfactory performance, regardless of theseemingly logical reasons given, should assume his chances of successon the job are minimal. An exception could be when managementrecognized much of the failure was theirs and vowed to change, buteven under these conditions the risk is high. Any reluctance by yourinterviewers to fully explain the circumstances of a discharge whenapplying for the vacancy should also be a cause for concern. Condi-tions 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 toleave the premises immediately. They may not even be allowed to cleanout personal items from their desks and are escorted to the door. Thereplacement is confronted with taking over the job without the bene-fit of the prior occupant explaining the details of the job. In employ-ment discussions, prior to starting, you should learn who wouldprovide you with basic information to perform the job. It is notuncommon for a job and the work environment to be in disarraybecause of the last occupant’s performance and attitude. You may findyourself busy cleaning up problems created by the person fired, includ-ing such tasks as mending relations with customers and other partiesoutside the organization. It is also quite possible you will be the oneexplaining to other employees and outsiders why the last person was


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

JOBS OPEN BECAUSE OF VOLUNTARYTERMINATION

Whenever a job vacancy occurs because an employee quits, youwill want to understand the reasons before accepting the job. Thereasons for quitting may encourage you to accept the job or continueyour job search. If you discover a succession of resignations from thejob or frequent resignations and high turnover in the organization,you should be extremely wary. Never assume you will be an excep-tion or immune from the conditions that have created past turnoverunless you’re convinced the employer has faced the problems andtaken corrective action. Ideally, before acceptance, you will be ableto meet the person departing and hear his reasons and if you do starthe will remain long enough to provide assistance. This is ideal but inmany cases impossible because the employee has already departed orthe employer may prefer a clean break without any contact.

Some employers try to hasten the departure of employees aftertheir resignation without concern for the notice they have given, be-lieving their presence will somehow contaminate the remainder of theworkforce. There is the irrational phenomenon that occurs all too fre-quently of when an employee with perfectly satisfactory performanceresigns, management becomes very critical and the employee is dis-paraged. The fact that the employee decided he was better off else-where and was leaving the team can cause resentment regardless ofthe circumstances. A job vacancy creates extra work for the managerswho must train the replacement and shuffle job assignments to coverthe job until the new employee starts. Someone must devote time torecruiting the replacement. Most managers have plenty to accomplishevery day and do not welcome the added tasks associated withrecruiting and training replacements. Every employee who resignsshould be prepared for the possibility of a change of attitude by hissuperior and fellow employees. No one can ever be certain of thereaction upon resignation that can range from hostility to displays ofaffection heretofore never revealed. Applicants should be wary of thevalidity of negative comments critical of departed employees but theyare not in a position to question the criticism nor would it be prudentto do so. Unfortunately the practice of “knocking the dead” and“blaming past management” will continue.


Quitting to accept a better job made possible because of the expe-rience gained with the present employer speaks well for the job. Thefact that another employer recognized the job as a stepping-stoneindicates that the job could do the same for you. Possibly other fac-tors contributed to the employer’s decision, but the last or presentjob is always a key element in employment decisions and frequentlythe most important. A very attractive job in a company with an out-standing reputation can augment your resume and allow you torepeat the progress of the person you replace.

Some resignations are caused by conditions unrelated to the job andare often submitted with great reluctance. Resignations because of fam-ily considerations such as relocation of a spouse, the need to attend asick family member, or remain home with children are examples. How-ever, most resignations are job related and the causes highlight prob-lems the replacement will confront and should evaluate before starting:

• Compensation Issues: If the employee who resigned was dissat-isfied with the compensation and was able to find a better pay-ing position for the same type of work, you can assume theemployer’s compensation policies are not competitive. This maybe due to philosophy or inability to pay more, but it tells youthere is a problem and possibly you could do better withanother employer. An employee’s resignation, or more impres-sively multiple resignations because of noncompetitive compen-sation, can motivate an employer to change pay policies, butyou better find out before starting.

• Promotional Opportunities: A resignation may occur when anemployee concludes there are no promotional opportunities inthe foreseeable future and seeks employment where the oppor-tunity is greater. This is no fault of the employer if employeeswho appear unlikely to depart for any reason occupied all thejobs to which promotion would be logical. A new employee willface the same promotional ceiling as the last person.

• Hours of Work: Many employees eventually become dissatis-fied with long hours of work and resign. They may be extremelywell compensated and see a clear path for advancement butconclude they have other priorities and interests of importanceto them. Their replacement will undoubtedly be expected towork the same long hours.

• Management Folly: Don’t expect to hear in your interviews thatthe vacancy was caused because the employee would no longer


tolerate mistreatment by bad management. Management tendsto protect its own and is not likely to reveal they have one ormore problem executives. Poor management is undoubtedly theleading contributing cause of turnover and not limited to anemployee’s immediate superior. An employee may be happywith his superior but see other executives in the organizationwhose actions are offensive. Discovering bad managers prior toemployment is difficult without questioning the person who leftthe job and comparing his comments with those of your inter-viewers. Both the former employee and your interviewers maybe reluctant or unwilling to discuss the reasons for the depar-ture. An indication of probable bad management is when aninterviewer voices negative comments about an employee thatvoluntarily resigned after years of service. Another indicator issimply a high level of turnover.

• Working Conditions: This is a broad category of causes thatmay have been the direct or contributing causes for the resig-nation. No list would ever be complete but it would include thephysical work environment the employee found inadequate oreven offensive. The tools for the job, including information sys-tems, were inadequate and made job performance difficult. Fel-low employees were cantankerous and uncooperative. Theseare only a few examples of unsatisfactory working conditions.

High turnover of employees in any organization should be a warn-ing to management as well as to applicants of internal problems thatrequire attention. For management, the questions are whether theycan identify the problems and do they have the will and capability totake corrective measures. For the applicant, the questions arewhether the desirable features of the job offset the identified prob-lems and how valid are management assurances the problems haveor will be eliminated. As an applicant, you will want to learn wherethe employees who voluntarily resigned are accepting employment.You may want to add these employers to your list of prospects.

PROBLEM OF THE EMBITTEREDBYPASSED EMPLOYEE

Whenever you are applying for a position above the bottom entrylevel, you must assume the possibility of someone within the organi-zation who believed he was qualified for the job was passed over.


When applying for any senior positions, you should inquire as to thereasoning for filling the job from outside and if there are any em-ployees who applied for the opening. Not only should you be con-cerned with those making formal requests but those who made onlycasual requests or employees that said nothing but were nearly quali-fied. Should you accept the job, most of these employees will bedisappointed but not embittered to the point of refusing to fully co-operate or engage in activity to discredit you. However, there may bea passed-over employee who is furious because you received the joband will make an effort to discredit you to prove your employment amistake. You should be skeptical of any of your employer’s assuranceof, “We talked to him and he is all right” or “He will understand.”

In organizations that have pursued vigorously a policy of promo-tion from within, it is all the more important to be sensitive to pos-sible resentment when management concludes employment from theoutside is necessary. If the outsider is bringing special skills andknowledge that no one in the organization possesses, there should beno difficulty with acceptance. However, many skills such as those as-sociated with managing people and planning are not immediatelyapparent, but the new employee must quickly demonstrate tact indealing with employees while being wary. If there is a passed-overdisgruntled employee, it is certainly best for the new employee topromptly discuss the situation direct with the unhappy individualand hopefully begin a healthy relationship.

In an applicant’s enthusiasm for a new job it is all too easy to over-look or ignore the reasons why the job is open. The causes of the jobopening will only be one of many factors in the evaluation of anemployer and job and seldom the paramount one in the decision to ac-cept or reject a job. However, the reason for the vacancy is importantand may become even more critical to your success if you accept thejob. Upon starting a new job you want to find yourself welcome witheveryone rooting for your success and not in an hostile environment.



❐ 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 thenecessity to be compatible. They won’t change for you.

Recognition and evaluation of the culture in an employer’s organi-zation and community is essential for career decisions to be based onreality. Cultural factors that define the work environment may beinnocuous, delicate to discuss, ignored, unrecognized, the product ofstrong convictions, ignorance, or chance, but they exist and work toyour advantage or peril. Some are subtle while others obvious. Mostare perfectly proper, contributing to the organization’s orderly func-tion, and of minimal importance to an applicant or possibly veryappealing, while others are sinister and persist despite their blatant ille-gality. Management’s intrusion into the personal lives of employeesand discriminatory practices are not as open or prevalent as in thepast, but only the naive ignores their possible presence. The job cultureextends beyond the workplace where activities engaged in off the jobmay be encouraged, not tolerated, or of no interest to an employer.

Avoiding cultural conflicts is a challenge for both the applicantand the employer. The stakes are high because cultural conflicts area major cause of employee turnover. An applicant wants to know ofthe presence of cultural factors that are attractive and any that areintolerable. The employer wants to select applicants who can per-form the job and fit into the workforce and not be in conflict withmanagement or employees. Both parties have similar objectives butcommunication may be difficult. The employer is constrained byantidiscrimination regulations and regardless of the prevalence ofimproper or excessive practices must maintain that none exists.Should an applicant ask if reports are true that you must be a Bap-tist or a Republican to be promoted within the organization, the in-terviewer must deny the report’s accuracy regardless of the facts.Furthermore, an employer cannot confirm an applicant’s age or

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racial background, although both may be fairly obvious. The appli-cant is hardly in a position to ask if the CEO is a tyrant who micro-manages all aspects of the organization, and the employer’sinterviewers are unlikely to ask the applicant how well an extreme,authoritarian management will be accepted by him or her. The resultis that applicants and employers rely on clues and indirect commentsto learn the desired information.

For every aspect of the culture, expect adherents within the organ-ization who are vigorous advocates who would resent any change.True believers of extreme cultural practices are absolutely convincedof the wisdom of their convictions, and those who disagree arewrongheaded fools deserving little consideration. A zealot’s opinionof you, whether from a superior or peer, will likely be colored byyour position on their favorite issues. The reverse is also true. If youharbor views others would consider extreme, it is doubtful you canbe fair and objective with those holding opinions contrary to yours.

Management styles and philosophies have a profound influenceupon an organization’s culture affecting the jobs of all employees.The result may be applauded or controversial but it is managementthat creates, approves, and condones the culture an employee mustaccept. Management’s efforts to revise or modify a culture with poli-cies and edicts are found easier to issue than to actually changeemployee thinking. Cultural change requires long periods of time forprejudices to disappear, and the victims become accepted as illus-trated by attitudes that once prevailed toward the Irish in Americaand still persists for Blacks. You will be wise to select your employeron the basis of conditions as they exist and give minimal credence topromises or hope of change. Holding convictions and prejudicesconsistent with management’s views are usually beneficial for one’scareer while open disagreement is definitely hazardous. An employeenot in sympathy with any aspect of a job’s culture is faced with sullencompliance or finding a new employer. If you are in an organizationthat conducts its activities with integrity and you concur with theimportance of ethical conduct, you will be right at home. If you arein an organization engaged in ruthless and dubious activities, fraughtwith discriminatory practices but all consistent with your moralstandards and prejudices, you again will be right at home.

An organization’s culture is the sum of numerous factors most ofwhich are positive or at least benign. Organizations of any size rarelyare culturally homogeneous and your primary concern must be withthe unit where the job is located. Cultural diversity within an organ-


ization increases with size and you cannot rely on a business’s parentcompany’s policies and pronouncements as indicative of conditionsin all subsidiaries or divisions. Furthermore, your immediate supe-rior’s virtues and prejudices will influence your job and career inspite of overall company policies and objectives.

DISCOVERING THE CULTURE

You learn of an organization’s culture by observation, questioning,and reading published material, but unless you understand the impor-tance of cultural factors and are alert to their presence, they may eas-ily be overlooked prior to employment. Some factors are obvious,such as racial or ethnic composition and dress codes, but most are notand direct questions become necessary. Even what appears obviousshould be verified with questions. You are not constrained by lawsand regulations in the pursuit of information as are employers whocannot lawfully inquire about age, race, and religion. Responses toyour 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 imbal-ances have developed and employment criteria are modified to cor-rect conditions. The most common is too large a proportion of onerace, religion, age group, or sex. If this recognition is voluntary andmanagement solidly supports corrective measures, change over timewill likely occur. Involuntary change required by government actionsor litigation may occur but with less enthusiasm and probably lesssupport. Any applicant considering a position under these circum-stances should extensively discuss with the employer possible inter-nal opposition that could adversely affect job success. Thesesituations may constitute a fine opportunity, an extremely difficultwork environment, or both. Employer efforts to modify imbalancesare now complicated by the possibility of backlash litigation.

NORMAL CULTURAL ENVIRONMENT

Every work environment has a culture of its own. The elements ofthe culture are largely innocuous and none individually of greatimportance to nearly all employees but in total they may constitute aproblem for some. Cultural factors that you may not even notice maybe of significance to others. An extremely informal work environmentmay have appeal for most but not all. A very formal workplace may

CULTURAL FACTORS 125

be thought necessary and desirable, but it can be stifling for someemployees. Each has its own dress code including hair styles, whichmay be in written policies or just understood with variations frownedupon by fellow employees and management. Even body weight spec-ifications and physical fitness may formally or informally becomepart of the culture with all expected to use the employer’s exercisefacilities and even participate in 10K runs. Work pace, interpersonalrelationships including romances between employees, traditions ofthe institution such as after-work drinks, and informal parties all con-tribute to the culture. How employees relate to each other can oftenbe 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 environ-

ment in which they work?

EXTREME FACTORS

Identification of cultural extremes is a primary task during theemployer selection process. Most cultural factors will be within anormal range and of no particular interest, and ideally you will notencounter any of the extremes. However, you must be alert for cul-tural extremes because your compatibility will directly affect yourjob success and future. Never forget, whatever appears extreme toyou, must be thought sensible by others or it would not exist. Everyaspect of a job except one may be pleasing to you but that one canbe so troublesome that the job would be impossible. You should alsoguard against selecting an employer solely because of one appealingextreme factor while ignoring other conditions. An example wouldbe accepting a job with an active “Christian” employer because ofone’s religious convictions if it pays low and is about to fail.

There are certain common cultural factors with a history of be-coming extreme, usually supported by determined advocates. Theline between normal and extreme is seldom clear and applicantsmust draw the line based on their perceptions. Only you can decideto enthusiastically accept or be repulsed by a deviant condition. Youmay 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


order of importance in a list of possible extreme cultural factors andany organization may exhibit several. The opportunity for extrem-ism to exist is undoubtedly greater in privately held businesses thanin public ones subject to more external scrutiny, but extremism canthrive anywhere. Factors addressed below should be viewed as eitherwarnings or advantages and not as advice to accept or reject a spe-cific job.

Management Excesses

The normal cultural environment in most businesses exists be-cause it’s accepted, functions well, and contributes to the success ofthe enterprise. Beware of those proudly claiming to have discoveredand 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. Applicantsshould view jobs with these companies as career moves without ahigh probability of a long tenure.

All businesses are essentially dictatorships with employees permit-ted varying degrees of freedom to act and speak without fear ofpenalty. The extremes are at the ends of the freedom spectrum withone having total authoritarian management making nearly all deci-sions at the top, issuing voluminous policy edicts and manuals, intol-erant of any dissent, and micro-managing all aspects of the enterprise.The other extreme is the democratic or entrepreneurial approach inwhich employees are given great discretion to achieve nebulous objec-tives. 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 promo-tions, compensation, and advantageous working conditions is normaland to be expected in most organizations. The competition is usuallyrestrained, civil and not a constant concern of employees. Howeverin some organizations competition is intense and an integral part ofmanagement’s system to extract maximum effort from employeesand eliminate those unwilling or unable to demonstrate total com-mitment to the organization. For these employers competition per-vades throughout the organization and is a major motivating factorwith the possible rewards for superior performance well known and


the fate of underachievers equally understood. Extreme performancerequirements in an intensely competitive environment become thedominant cultural factor.

Comparisons of employees at all levels are continuously beingmade 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 com-pared using financial or production statistics distributed for all toinspect and as motivation for the laggards. As examples, in profes-sional service firms the number of hours billed to clients is a criticalstatistic. For employees involved in selling, the volume sold com-pared to others and in prior periods is all-important.

Large employers with highly competitive cultures commonly hiremore entry-level employees for training and fast-track executivedevelopment programs than can possibly be promoted. Organizationstructures are roughly in the shape of a pyramids and the closer to thetop, the fewer the jobs remain to which employees can be promoted.The employers know many will eventually find the employer’s de-mands intolerable and quit although what was expected was fully ex-plained during the employment process. Others the employer willfind unsatisfactory despite great care taken in their initial selection.Some of the best will be recruited away by other employers leavingonly a few survivors. During your interviews, you will find it enlight-ening to learn how many survivors remain and their present jobshired five years ago into programs similar to the one your applying.

With any employer you will want to know how you will be eval-uated but in intensely competitive enterprises, it is of particularimportance. You will have to accept the employer’s system althoughthe probability is high the employer is dissatisfied with their meth-ods and have plans for modification or replacement. Accurate andfair evaluation of employees has been one of management’s mostperplexing challenges and there are no uniform or accepted ap-proaches. Presently popular methods of forced ranking of employeeseither in a straight line or into a bell curve (cynically referred to as“rank and yank” systems) have their critics and are becoming thesubject of litigation. If you are interviewing for a job in an intenselycompetitive company where a forced ranking system is in place, youwill 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 thrivein an intensely competitive culture where employees are essentiallypitted against one another but many conclude it is not for them.


Religion

Any business controlled and managed solely by members of onereligious faith or businesses permitting and encouraging religiousactivities in the workplace may be difficult for those of other faithsor beliefs. If you are of the same faith, you should have little prob-lem with the environment. Whenever the owners and managers areall active practitioners of the same faith, it is reasonable to assumereligious beliefs were a factor in their selection and this will continueto be a factor in future promotions and employee relations. Sincereligious beliefs can be so strong, for some it may be impossible towork for an employer dominated by one religion despite the em-ployer’s efforts to be tolerant and considerate.

Religious activities sanctioned by management in the workplacemay be welcome by the devout of the same faith but can be extremelyoffensive to others. Meetings conducted by the devout will includebelievers as well as possible reluctant attendees, fearing for their jobsbut offending those who do not participate. Proselytism in the work-place, in whatever form it takes, can be a constant irritant to the unre-ceptive and therefore disruptive to the organization. It can also befrustrating to those promoting the religion to find unwilling or hos-tile candidates for their religious arguments. Intense religious activity,whenever openly encouraged and supported by management, existsbecause key executives believe it is proper and desirable. There maybe displayed icons, religious pictures, and even statues revealing theintensity of their beliefs. Persistent religious activity in the workplaceby other employees, if neither endorsed or condoned by management,can be troublesome but usually will not affect your career or job. Ifyour beliefs are so strong and you continue to engage in religiousactivities in your workplace contrary to management policies, thenassume you are on a path to unemployment martyrdom.

Racism

Despite claims by nearly all employers to be “equal opportunity em-ployers,” racism still exists to varying degrees and it is not just a blackand white problem. Substantial progress has been made in reducingdecisions influenced by race affecting employment, promotions, andjob content but race remains a factor. Your first suspicion that theemployer may not be “equal opportunity” will come from observingthe employees you meet and in the workplace. A preponderance of


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

Sex

Enormous changes have occurred in the workplace with jobs forwomen now open at all levels and sexual harassment laws beingenforced. However, anecdotal evidence supported by abundant sta-tistics demonstrates that equality in the workplace is far from uni-versal. Sexual discrimination is generally thought of in terms ofwomen being treated unfairly and every female applicant shouldquestion the conditions under which she will work. What is theemployer’s record on equal pay, advancement, the “glass ceiling”phenomenon, pregnancy leave policy, sexual harassment suits and ifany, how were they resolved. Male applicants must ask themselveshow they feel about working for a woman or even working withwomen as equals. The presence of women in management positionsat all levels is the best evidence of desirable conditions for womenand their absence a warning. A preponderance of men or women inmanagement positions should cause members of the minority sex toquestion their chances for advancement.

Politics

If you have strong political convictions and are active in politicalcampaigns and fund-raising, attend political meetings, and discusspolitics at every opportunity, you better be certain your activities andviews are acceptable to your employer. An employer with strongpolitical views similar to yours may be delighted to have you as anemployee. However, an employer may object to political activism inthe belief that such activities interfere with job performance or an-tagonize other employees with contrary political beliefs. Owners ormanagers with political persuasions different from yours are not


likely to approve of activities they find offensive. Those controllinga business and contributing to a candidate will not enjoy seeing oneof their employees on TV at an opponent’s rally. Some employersencourage political participation and accept a diversity of opinionsand respect an employee’s rights off the job, but don’t assume this tobe the case without ample confirmation.

Management and owners often are active political supporters ofcandidates and causes, making company and personal financial con-tributions. The contributions may be motivated by a desire for goodgovernment but more likely as an investment to promote or protectthe organization’s interests and as a means to gain access to politi-cians. New senior managers may be expected to participate with per-sonal contributions or by arranging company contributions that maynot always be proper. Lesser employees may be asked to contributeto political action committees or “volunteer” their time to help can-didates. Applicants should explore the unwritten obligations theymay incur before joining an organization known for its politicalinvolvement. Equally important is how compatible are an applicant’sbeliefs with those who control the organization. Imagine how dis-tasteful you would find being pressured by your employer into mak-ing financial contributions to a candidate you detest.

Devotion to social causes and emotional political issues can be par-ticularly troublesome in the workplace. Abortion, school prayer, andgun control are currently hot issues that raise passions for some be-yond the level of rational argument. Convictions can become so strongthat there is little tolerance for those who disagree. Many employerswill discretely attempt to screen out and not employ individuals withsuch strong views that they become disruptive on the job. Owners ormanagers, harboring such strong views on these issues that they aremotivated to actively participate in organizations promoting theirviewpoint, may be a problem for unsympathetic employees.

Charity and Volunteerism

Charitable contributions and volunteering to benefit causes and theunfortunate is accepted and popular with most people. In many busi-nesses, volunteering for charitable activities can provide both greatpersonal satisfaction and a way to meet and impress peers and supe-riors. Unfortunately, some employers create an environment in whichemployees feel compelled to donate excessive amounts of cash or timeto charitable causes advocated by the employer. All too frequently, the


employer’s favorite charity may not be the employees. Involuntarymonetary contributions to charitable causes are tantamount to a payreduction.

Volunteer time can become a burden when one prefers to spendtime in other activities or is not enthused about the cause. Seniormanagers may be coerced to spend excessive time with charities sup-ported by chief executives or their wives. Conspicuous and demand-ing programs benefiting others in the community are difficult foremployees to accept and viewed as hypocritical when the employerfails to be fair and generous with his own employees. Applicantswith strong opinions regarding their right to make their own deci-sions to contribute and volunteer may experience difficulty withemployers who have very active programs.

Age Differences

Generation gaps have always existed and most people prefer asso-ciating with their own age group. When selecting an employer, youshould look at the ages of those you will be associating with on adaily basis at all levels of the organization. Are their ages roughlycomparable to yours and if not will you be comfortable with thatgeneration? How will you feel about working for someone muchyounger or older than you? Compared to the ages of other employ-ees, will your age be an advantage or disadvantage in job assign-ments and promotions? These are questions you will have to askyourself and expect little advice from the employer. Age discrimina-tion is against the law and a prudent employer will claim age is nota factor in any decisions, although it often is a major consideration.

Age discrimination after employment is a concern for older appli-cants but their first challenge is to be hired and get past the door.Discrimination may very well have occurred before employment butsupported only by an applicant’s suspicions of being denied employ-ment for false reasons other than age. Once in an organization, theemployer’s true policies and practices toward older employees, bothformal or unwritten, become obvious. An older employee should notcount on being an exception to prevailing discriminatory practices.

Paternalism and Recreation

Some employers establish extensive recreation facilities and pro-grams for their employees. Physical fitness and training facilities, day


care, parks, hunting and fishing camps, tours, and preventive medicineprograms are some of the benefits provided today. Extra vacations andsabbaticals, generous maternity leaves, and bonuses are increasinglycommon. For most employees, all of the benefits offered are appreci-ated and utilized. For many applicants, the benefits constitute an in-ducement to seek employment in the organization. The facilities andevents represent an opportunity to meet and become better acquaintedwith fellow employees at all levels. The problem comes for those pre-ferring more privacy who are unwilling to participate. If you are notinterested in all of the benefits offered, you should learn how compul-sory their utilization is before accepting the job.

College or University Preference

An important criterion for employment and promotion in someorganizations is the college or university attended. Graduates of aspecific school or of a group of schools such as the Ivy League maybe given preference regardless of the qualifications of other appli-cants. School discrimination usually occurs because of the extremeloyalty an owner or controlling executive has for the school heattended and honestly believes the graduates are superior. Once thereis a preponderance of graduates from one school in an organization,the discrimination tends to perpetuate itself. This variety of discrim-ination 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 inclusiveand every applicant should be alert to whatever he or she believesextreme. Once employed, you must contend with company-supportedpolicies and practices and individuals whose beliefs you find to be non-sense or perhaps with whom you agree. It is much easier to learn of anorganization’s culture than the ardent beliefs of employees you nevermet before starting the job. The person sitting closest to you maybelieve in astrology, the occult, and unconventional therapies and willbe excited about your concurrence or can’t understand your reluctanceto agree. You can learn to your satisfaction of the organization’s over-all culture but probably can only hope for the best in fellow employ-ees. However, the odds are they will be more like you than not.



❐ How would you characterize the management style for theemployer?

❐ Does management display any techniques, fads, or idiosyn-crasies that are not mainstream or would be considered un-orthodox by most observers?

❐ Is religion a factor in hiring and promotions?❐ Is there evidence of racism in the composition of the work-

force?❐ 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 col-

lege you attended?❐ Does the employer manage and promote intense internal com-

petition?


CHAPTER 10

The Employment Process

Never forget that your employment depends upon anemployer’s need for you and not your need for a job.

During job interviews your task is twofold: learn about the employerand promote yourself as a well-qualified applicant. Interviews are yourbest and probably last chance to confirm information you possess andto gather answers to remaining questions. The purpose of every meet-ing with an employee or representative of an employer is to create theopportunity for both parties to gather information. Regardless of thecircumstances, the formality or informality of the occasion, all pre-employment meetings influence the eventual decisions of the partici-pants. Interviews may be at the employer’s offices, job site, casualluncheons and dinners, or entertainment events, but you can be certainthe interview process is incessant and the evaluations continuous.

Assume everyone you meet will give an opinion of you. Achievinga positive rapport with your interviewers is definitely desirable andshould increase the chances of their issuing a favorable opinion. Youare 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 isto the employer and their opinions will be of your probable job per-formance if employed and not necessarily how fond they are of youpersonally. Regardless of how much you like and have confidence inan interviewer, never disclose information you do not want to be-come part of the employer’s evaluation. An equally important reasonfor developing a positive rapport is to increase the probability ofyour interviewers being more candid and forthcoming with informa-tion on subjects you find troublesome.

135

Every interview is an opportunity to accumulate information.During your interviews, remember that while you are talking youlearn nothing, and your challenge and task is to encourage the inter-viewer to talk throughout the interview and not just ask you ques-tions. You should strive for a two-way conversation and not one inwhich you simply respond to the interviewer’s questions. Mostinterviewers want a broad conversation and will not be impressed ifyou simply respond and do not introduce subjects important to you.Brief precise answers to an interviewer’s questions may be accuratebut interviewers expect more. Your preparation for every interviewshould include identifying remaining questions that are essential foryour evaluation. Rank them in order of importance because youmay not have the time or opportunity to obtain all the answers.Make a written list if necessary but it will be more impressive dur-ing interviews to ask your questions from memory rather than topull out a list. Presenting questions, indicating you have made aneffort to learn as much as possible about the employer, will impressyour interviewers. Casually working your questions into a generalconversation is not only pleasurable for the parties but is also moreeffective in securing answers. Interviewers, like everyone else, enjoytalking about themselves and their organization so encourage themto do so. A good productive interview for both parties should be afriendly chat.

Every interviewer is a representative of the company and indica-tive of the type of employee found acceptable to the employer. A crit-ical part of your evaluation concerns whether or not you want to beassociated with the type of representatives you meet prior to employ-ment. To know someone, you must engage him or her in conversa-tion. It may happen that your opinions of interviewers will beuniformly good or bad but more probably you will encounter a mix-ture; some you will like very much while others of whom you willhave a lesser opinion. Don’t be too hasty in drawing conclusions be-cause good employers with wonderful job openings and opportuni-ties may not have their best and most effective employees conductinginterviews. You may encounter a weird interviewer or have a strangeinterview, but if other interviews with employees of the same em-ployer are satisfactory, tactfully inquire about the aberration andthen evaluate the situation. If you tactfully describe the individual as“unusual” or “certainly has strong opinions,” you will most likelyreceive a prompt explanation because they will know exactly whatyou’re talking about.


INTERVIEWING: AN ACQUIRED SKILL

Similar to any other activity, interviewing is an acquired skill thatimproves with practice but remains a subjective exercise. It requiresobservation and the accumulation of information, judgment in evalu-ating the data, and eventually a prediction of human performance andbehavior. During most interviews, the emphasis is on personality char-acteristics rather than background because prescreening has alreadyestablished that the applicant possessed the minimum education andprior experience for the job. Predictions of failure entail little personalrisk for the interviewer because the applicant is either rejected ordeclines employment, leaving the validity of the decision untested. Pre-dictions of success are tested in the performance of the employed andthe judgment of those who recommended employment is confirmed orquestioned. Displaying good judgment in selecting employees isalways a valued trait for executives and failure to do so can have a neg-ative effect upon their careers. Applicants evaluating alternatives mustalso display judgment and in time they will be able to review their deci-sions with satisfaction or regret. Predictions of failure by both appli-cants and employer are probably more reliable than those of success,but in either case there never is complete certainty.

EMPLOYMENT PROCEDURES

Very early in your discussions with a prospective employer you willwant to learn the nature of their employment procedures and the stagethey are in at present. You may find their procedures and timing coin-cide very well with your plans or contain unacceptable aspects andeveryone is wasting their time. It is also possible their employment pro-cedures include elements and techniques you believe to be offensive andunacceptable. You should attempt to discern the degree of flexibility inany procedures important to you. Answers to these questions will giveyou 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?

THE EMPLOYMENT PROCESS 137

• Is there an urgency to fill the job and only applicants who canstart promptly considered?

• Is the job to be filled at some future date with the exact timeinfluenced by events that first must occur?

• If the job opening is dependent upon other events, what are theevents and their probability of occurring?

• Is the starting date determined by the commencement of a train-ing class, opening of a new facility, start of a major project, orsome other event with a predetermined schedule?

• Is there wide latitude for starting or a general period of timethat would be acceptable as may be the case when college grad-uates are recruited for fast-track management programs?

Every applicant should learn during the employment processwhen he or she could or must start and why. Learning of the em-ployer’s timing enables an applicant to decide if the employer’s tim-ing fits his or her personal needs and plans. Understanding the levelof urgency to fill a job also provides insight helpful in subsequentnegotiations over compensation.

Status of Employment Procedure

An employer seeking to fill a job may be engaged in an extensivesearch for applicants and intends to interview a number before mak-ing a decision. These searches may involve a first round of prelimi-nary screening of prospects with the finalists brought in for moreintensive interviews. Searches of this type can consume months andyou will want to know their present stage. You will want to knowtwo 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 employmentcan be made? Should your first interview conclude with the inter-viewer with an indication that further discussions are desired, it isreasonable to ask the names of future interviewers, their titles, theirrole in the employment process, and when and where the meetingswill occur. Often, but not always, the number of employees or em-


ployer representatives you meet is an indication of the employer’sview of the job’s importance. Applicants for low-level positions mayonly meet their potential supervisor and possibly a screening inter-viewer. Applicants for senior positions may have numerous interviewswith various executives and members of the board of directors. Ap-plicants chosen for their promotion potential as well as specific posi-tions can expect to encounter numerous interviewers. From theapplicant’s position, the more interviews the better because each isanother opportunity to learn of the employer.

Employment Obstacles

Are job offers made conditionally subject to checks and tests? Cer-tain preemployment obstacles are routine and generally accepted suchas medical examinations and reference checks but some are highlyintrusive. It is wise to inquire of their nature if you have incidents inyour background preferred forgotten or philosophical objections tothe procedures. These more intrusive obstacles can include privateinvestigators checking your life in detail, interviews with your spouseand neighbors, credit checks, criminal checks, and psychological test-ing. The extent of psychological testing can vary widely, ranging fromsimple paper and pencil tests of intelligence and interests to wide-ranging interviews with psychologists or psychiatrists. Employerswho engage in the more intrusive investigations are convinced of theirvalue and an applicant’s choice is to accept the obstacles or seekemployment elsewhere. Applicants should learn at what stage of theemployment process the obstacles will be encountered.

Employment Decisions

Who will make the decision to employ or reject you? How will thedecision be made? Everyone you meet will express an opinion of youand in some instances the employment decision will be by commit-tee, but usually someone with authority will make the all-importantfinal decision. The resulting job offer will also require compensationdecisions and a reaffirmation that the job is still open. It is notuncommon for an employer’s circumstances to change either in theform of job vacancies being canceled or an applicant being asked toaccept a job other than the one originally discussed. The ultimatedecision maker may or may not be someone you meet. Troubleoccurs when the executive has limited availability or procrastinates


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

WHO YOU MAY MEET

During the employment process, you may encounter a variety ofemployees, consultants, and professionals from whom you cangather information useful in your evaluation of the employer. Theyare focused on their task of evaluating you and may not realize youhave your own evaluation program. Understanding their role andprobable authority should help your presentations as a candidateand enable you to request information from those most likely tohave the answers. There are wide differences among employers as tothe people involved in their employment process and as an applicantyou may not encounter every category described or confront alto-gether different ones. The information provided here is to introduceyou to the most probable people you will meet and what to expectto take advantage of every meeting.

Little People

Throughout the process, it is inevitable you will casually meetpeople in positions of less stature than those conducting the inter-views. They may be security personnel, receptionists, clerks, secre-taries, or various assistants and although your exposure will belimited, they will still form an opinion of you and if they have or takethe opportunity, to voice their opinion. If you have to wait a shorttime for an interviewer in the presence of his secretary, you shouldassume her opinion would eventually be voiced. It is to your advan-tage to treat all the “little people” with great courtesy and respectand engage them in friendly conversation as you would your neigh-bor. Not only will treating these people as equals be proper and pos-sibly help your cause, they can be a great source of information.They may have facts and a perspective on the organization that youwill not gain from your interviewers. Without providing any detailsor secrets of the employer, they may convey genuine enthusiasm fortheir jobs and the employer or converse in a guarded manner thatyou should interpret as a warning.


Screening Interviewers and Salespersons

On the front line of the employment processes are individualsresponsible for identifying applicants and initially screening them,and presenting a positive description of the employer to them. Theywill be an applicant’s first substantive contact with the employer. Inthis general category are human resource department recruiters andinterviewers, college recruiters, management search personnel (head-hunters), and employment agency personnel. They have a dual roleof screening applicants and selling or persuading applicants that theemployer is desirable. Their role is to produce attractive applicantsfor others to interview, which often results in glowing, exaggerateddescriptions of the employer. Few are authorized to make job offersbut they wield great power over applicants because they have thepower to reject. In their role as gatekeepers, they can decide if anapplicant is unsuitable and effectively reject the applicant by notarranging additional interviews. Should the interviewer decide thatan applicant is suitable and channel him or her into the system forothers to meet, he can influence the outcome by the level of enthusi-asm displayed for the applicant. They usually are working from a setof criteria developed by the employer that lists the characteristicsdesired in an applicant and are not in a position to question theappropriateness of the criteria.

Your Prospective Boss

After preliminary interviews, you will be introduced to the individ-ual who will be your immediate supervisor if employed. This will beyour most important interview and the best opportunity to learn of theactual job and job environment. Prior interviewers likely have giventhe potential boss favorable comments and any reservations they haveregarding your suitability along with your resume or application. Youmay be confronted directly with the reservations in the discussions orhave to discern their presence from clues in the conversation and doyour best to satisfy any concerns. Few managers are highly trained ininterview techniques but that doesn’t undermine their confidence orplace less weight on their opinions. Many managers have one or twofavorite interview questions and place extra significance upon theresponses. These pet questions are usually recognizable because theytend to be unrelated to the actual job. A manager’s primary job is to


effectively oversee all or a segment of the employer’s total operationsand selecting subordinates is important but a peripheral part of thejob. Interviewing may be an unwelcome distraction from activities themanager believes require immediate attention, resulting in brief meet-ings that can be unsatisfactory for both parties. Management criteriaare: Can you perform the job and not create problems? Are you thebest available candidate? The nearly similar applicant’s criteria are:Can the job be performed? Are these people with whom I would liketo associate? The more time you can spend with your potential bossthoroughly discussing the job and becoming acquainted, the greaterwill be the odds that neither one makes a mistake.

Your Boss’s Superiors

In some organizations it is customary for senior executives tointerview applicants for positions reporting to their subordinates.Often interviews of this type indicate that the applicant is a finalistunder consideration and about to receive a job offer unless the sen-ior executive decides against it. Others in the organization are notabout to arrange the interview unless they are recommending the ap-plicant and believe the applicant will be acceptable. In cases whenthe applicant is particularly attractive to the employer and is sus-pected to have other job alternatives, the primary purpose of theinterview with the senior executive may be to impress and “sell” theapplicant. Whatever the employer’s reasons, interviews with seniorexecutives are an opportunity to learn of the organization and ob-serve the caliber of people at the top.

Other Executives and Directors

You may be asked to meet executives or others that are neitherhuman resource department interviewers or in areas in which youwould work if employed. In some cases, the employer has establisheda committee responsible for recruiting or for searches with all mem-bers interviewing candidates. Committees are common in profes-sional organizations seeking promising college graduates and whenan employer is searching for a very senior executive. Another type ofinterviewer is an individual whose role is to evaluate your technicalcompetence if applying for a technical position. Interviews of thistype are a particularly valuable opportunity for the applicant to learnthe state of the employer’s technology. It is not unreasonable for an


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

Psychologists

The use of professional psychologists to evaluate applicants re-mains a common practice and also controversial. The controversyand basic problem that exists is that psychologists may be excellentat identifying personality characteristics and intelligence levels, butthe precise job requirements for success are often not fully known orare speculative at best. They are much better at predicting failurethan superior performance but it is argued the obvious failuresshould have been screened out before meeting a psychologist. Shouldan employer request you undergo one of their interviews, you havelittle choice but to do so or forget the employer. Employers utilizingprofessional psychologists are totally convinced of their value andplace great weight upon their opinions. Often employers informapplicants uneasy with the procedure that the psychological exami-nation is only one of many factors in their employment process andnot to be concerned. This is generally nonsense. A positive factor inbeing asked to meet a psychologist is a strong indication you are seri-ously being considered for employment. Psychological assessmentsare expensive and not used for preliminary screening. Many employ-ers evaluate applicants utilizing paper and pencil psychometric testsand you have little choice but to submit. In either case, you may aswell appear willing and enthusiastic taking the tests presented if youwant the job. The practice is widespread and can be encountered inany industry.

YOUR POINT OF CONTACT

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


As part of the employment process, you may encounter executivesor interviewers to whom you will have little or no exposure if em-ployed. They may be individuals of great charm and status or peopleyou find distasteful, but if they will not be involved directly with youor can influence your career once employed, you should not give themmuch weight in your evaluation of the employer. Individuals involvedin screening and initial interviews often disappear or are not involvedwith those employed after they fulfill their role. Very senior execu-tives, semiretired “elder statesmen,” prominent directors, and indi-viduals with “celebrity” status may be utilized to impress highlysought after applicants; you should enjoy the meetings, learn all youcan, and question their continued role as it relates to you.

EVALUATING INTERVIEWS

Quietly assimilating all you learn and see without judgmentalcomments during your interviews will aid in your employer evalua-tion. Compliments will never hurt your cause, but unfavorable im-pressions and conclusions regarding your interviews should largelybe kept to yourself. An employer’s representatives and employees areeither acting in a manner they believe proper or it is the best they canbe under the circumstances. Poor interview questions and techniquesby employer representatives reflect badly on the employer but maybe due to inexperience and do not necessarily reflect upon the jobyou are seeking. Negative observations from you will not be wel-come and you certainly do not want to cause anyone embarrass-ment. Skepticism is appropriate during the employment process butit is best concealed. An applicant will be wise to appear to acceptwhatever is presented as fact. Your objective is to evaluate andimpress the employer to offer you a job and to participate in argu-ments will not help. Should you find yourself in an argument, re-gardless of how valid your position, assume your chances of a joboffer are slim.

As an applicant, you are entitled to courteous treatment and re-spect. The degree to which you are properly treated is a strong indi-cation of the quality of the employer and becomes an important partof your evaluation, but you must maintain your perspective. Eventsand incidents during the employment process tend to be given dis-proportionate weight in an evaluation because you are personallyand directly involved as opposed to reviewing at your leisure a finan-cial statement that actually may be far more important. Royal treat-


ment during the employment process can impress an applicant andtend to mitigate concerns about other serious problems of the em-ployer. Highly sought-after applicants should remember that afterthe courtship and if they accept the job, they will be expected to per-form in a very different environment. Shabby treatment will dis-courage an applicant regardless of many other attractive features ofthe employer. An ideal employment process that reflects well uponthe employer would include the following features:

• Organized: Your time with the employer for interviews wouldbe totally planned prior to your visit, with interviews and em-ployment obstacles all scheduled. You should be informed priorto the day whom you will meet and why.

• No Delays: When scheduled to be interviewed by an executiveat a certain time, the interview will commence at that time. Youwill not be forced to spend large amounts of time just waitingso they can “work you in.”

• Interviewers Informed: Your interviewers are informed prior tothe interview of your qualifications and background and knowof the job for which you are applying.

• Interviewer Attitude: Your interviewers are openly enthusiasticand convey a positive impression of the job and employer. Thelevel of enthusiasm displayed is often an excellent indicator ofthe level of morale throughout the organization. Every appli-cant is treated with respect and made to feel important regard-less of the outcome.

• Prompt Responses: Throughout the employment process, theemployer is open with you as to your application’s status andresponds quickly without prodding. Additional interviews aretimely scheduled and offers or rejections are given without de-lays. When delays occur at any stage of the employment pro-cess, the reasons are explained to the applicant.

During the course of the employment process, evaluate the roleand status of the human resources (HR) department in the organiza-tion. In the past, this department was named “industrial relations”or “personnel” and some employers still use the archaic names al-though human resources is currently fashionable. Typically, the HRdepartment is responsible for recruiting, wage and salary adminis-tration, benefit administration, safety and medical, security, training,labor relations, and dispute resolution involving employees. Not all


HR departments have every function listed above and some haveothers, but as you progress through the employment process it isworth your time to learn of HR’s responsibilities and to attempt toevaluate its stature in the organization. Prior to employment, willHR be involved in deciding your compensation? After employment,will HR intervene if you are treated improperly? The answers willdepend to some degree upon the status of HR in the organization.Status can vary widely from real power and authority to make deci-sions that are respected down to little authority and largely a house-keeping or clerical function. One of the best indicators of status is towhom the head of HR reports. Reporting to anyone less than thesenior executive at the location where you will be employed is anindication of limited authority and you probably can expect minimalservice or assistance from HR. The location and condition of HRoffices compared to other departments can be another indication ofthe status afforded HR.

In the HR department, you may encounter professional or highlyskilled interviewers who can assess very well your potential and per-sonality. However, they often do not know the characteristics andattributes essential for the job, creating a knowledge gap and a ten-dency to rely on stereotypes for their criteria. “He must be an aggres-sive extrovert to sell.” “He must be a strong willed, dominant personto manage.” “She must be a tough and able to pound the table tonegotiate.” However, many individuals that do not fit the stereotypescan perform the jobs very well but if you do not fit, you should beprepared to explain your approach to the job.

Throughout the employment process, you will meet a variety ofindividuals for the first time. All are trying to do their jobs in the bestway possible, but they have interests and problems more pressingthan decisions regarding you. Some will be like you, looking for ajob, and others may be thinking they should but they are presentlyon the employer’s team and will conceal their doubts and concerns.Recognition of the fact that your interviewers are only human toowill help you have more successful interviews.



❐ Are you organized to gather additional information duringyour 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?



CHAPTER 11

Personal Objectives

The constant conflict between career aspirations and available alternatives.

Equating your short- and long-term career objectives with possi-ble job alternatives is a continuous challenge for every individualthroughout his or her working lives. The challenge presents itself inthe 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 fam-

ily responsibilities and other interests?• How can I explore other job opportunities without jeopardiz-

ing my present job?

The answers will always depend upon the circumstances and yourparticular interests and wishes at the time. In the final analysis, youare best qualified to decide upon the answers because you shouldhave the most facts and will experience the benefits or harm fromyour decisions. The foundation of your employment security is edu-cation, experience, and ability and all are attributes you take withyou. Gather all the advice available but in the end, you alone mustmake the important decisions in your career. Make your decisionsand don’t look back.

149

NOTHING IS FOR CERTAIN

Complicating your career decisions is the absence of certainty andabsolutes. A healthy recognition of this fact is essential for evaluat-ing alternatives and your eventual decisions. In the absence of cer-tainty, accept the premise that your first objective is to improve theodds for decisions that result in favorable outcomes. The most onecan hope for is to improve his odds because there are far too manyvariables to assimilate and the future remains unpredictable. How-ever, the simple process of avoiding the obviously undesirable is amajor step toward improving your odds. Also accept the possibilitythat despite your best efforts and care in evaluating your personalsituation and selecting employers, your decisions may prove to bewrong for totally unforeseeable reasons. At any time you may befaced with unanticipated, unplanned, welcome, or unwelcome careerdecisions. Your employer may be sold or merged, resulting in yourjob being eliminated or greatly expanded, which may in turn im-prove your outlook. Even in organizations believed to be relativelystable, you should not be too troubled or surprised if your presentjob has duties added or deleted or a new job contains aspects you didnot expect. The unexpected encompasses not only the undesirablebut also windfalls and great opportunities, and you should have theflexibility to respond. Out of the blue, you may be offered a promo-tion or a great new job. Unexpected good things do happen.

You have to take some chances and accepting a new job alwaysinvolves uncertainty. Often doing nothing and remaining on yourpresent job is the greater risk. Being comfortable in one’s present jobwhere you know the job duties, are meeting objectives, and receivingregular paychecks can be a grand illusion with an inertia that is dif-ficult to overcome. For all the reasons described in prior chapters,your job may change or be eliminated and overnight the illusion ofcomfort and security disappears to be replaced with the hard realityof seeking new employment. The illusion also contributes to the ten-dency to wait too long before finding another employer although itis obvious there is no future in one’s present job. Further complicat-ing job moves are irrational fears of the unknown whereupon chang-ing jobs, you must meet and associate with new people in a differentenvironment. Recognizing that you must take some chances and theprobable presence of illusions, inertia, and dark fears should makeyour job changes easier.


CAREER PLANNING

Establishing career goals and interim objectives is a commendableactivity but fraught with problems and all too often bordering on fan-tasy. Career planning by its nature must be devised at the start of acareer based upon available information that describes conditions asthey presently exist; however, no one knows with any certainty whatthe future will bring. Any career plans other than the most generalalmost certainly will either be greatly modified or discarded, if not for-gotten, because of the vicissitudes of the job market and change in theneeds and interests of the individual. The job you aspire to ten yearshence may not even exist at that time and others that do not existtoday may emerge and be more attractive. Very broad and generalcareer objectives do have some value, but rigid objectives whereby oneexpects at a specific age to be in certain position at a minimum com-pensation level can only lead to unnecessary frustration. Explicit andrigid objectives constructed at the start of a career will almost certainlybecome totally unrealistic as the career progresses.

If you decide to develop a career plan with objectives, it must con-sist of both short- and long-term plans with the short-term objectivesrepresenting steps to achieve the long-term goals. Your goal may beto become president of a significant business but your emphasis mustbe on the steps to reach your goal and little on what you would doonce you arrive. It is unlikely you will be able to identify every step inadvance, but you should be able to recognize opportunities as theyoccur as desirable steps in your career. With a long-term plan, itshould definitely be possible to avoid purported job openings thatwould not constitute forward steps. Avoiding jobs you find inconsis-tent with your career plans and recognizing jobs as such is an impor-tant part of any career planning. For any career planning, you shouldrealize you are now on the first step. If unemployed, you should beseeking a job that constitutes a step up. If employed, you should bedeciding what your logical next step is either with your presentemployer or with another. If pressed for immediate income, you mayhave to compromise and temporarily get off your career ladder withthe expectation of eventually resuming your climb.

Many successful people enjoying jobs of great status and prestigenever had their present positions as an objective at the start of theircareers. They were educated in areas of interest like marketing, engi-neering, or finance; they started at beginning jobs and progressed

PERSONAL OBJECTIVES 151

from there. They performed well and enjoyed every job as they pro-gressed, and through a combination of their abilities, chance events,and available job openings arrived at their present positions. Theynever had a master career plan but they knew their preferred field,performed well on every job, and as job openings of increased re-sponsibility became available with their present or other employers,they accepted the new opportunities. They illustrate the fact that ifyou are ambitious, you can have great success by performing well onyour present job and not hesitating to accept opportunities while notbound to a specific career plan. The opportunistic approach alsorequires a sense of when it is time to move on and actively seek desir-able alternatives.

It’s Your Choice

Job opportunities and objectives have to be evaluated and equatedwith individual interests and how one wants to spend their time onand off the job. Some are determined to devote whatever time andeffort is required to further their career aspirations and to make thesacrifices necessary to maximize their income. Many simply want asecure job that provides an income adequate for minimal needs andwith hours of forty or less per week and plenty of time for variedinterests. Some seek a balance by refusing to become workaholicsbut willing to periodically devote extra time and effort to their jobs.

No one can say which lifestyle is best or superior and if a partic-ular selection is right or wrong. However, all involve trade-offs thatrapidly become apparent. The ambitious career-minded people findthey have limited time for their families or outside interests, ration-alizing more time will be devoted to these interests once they succeedand are wealthy. They also may very well enjoy every minute of theirjobs and prefer it to any other activity. The individual who worksonly enough to get by realizes he will forgo job status and materialluxuries, rationalizing that they are unimportant compared to hisfreedom and other interests. The balanced life advocate develops acompromise and in doing so enjoys a reasonably good life but knowsthe very top jobs are out of reach. The challenge is to find a job youthoroughly enjoy and that you can perform consistent with thelifestyle you prefer. To have one without the other is an unhappycondition to be avoided.


FOCUS ON THE PRESENT

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 shouldbe further evaluated for its characteristics as preparation for futurepositions. Before acceptance, you will automatically evaluate a jobon the basis of the fairness and adequacy of the compensation, buthow it will influence your next job prospects should not be over-looked. The employer may be financially sound and stable and thejob considered “permanent” but never forget it is most unlikely thejob will be your last. Critical criteria for evaluating your present jobor 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 oranother?

In Chapter 1, you were advised to construct your concept of theideal job for use as a standard against which to evaluate job oppor-tunities. Career and lifestyle preferences, coupled with recognition ofthe fact that any job you hold can affect your chances of findinganother job, should influence your thoughts for an ideal job.

If you are employed, a comprehensive study of your alternatives re-quires an evaluation of your employer and job. Unless you are in atemporary or menial position you are certain to leave, it is possiblethat remaining with your present employer is your best alternative.Start by using this book to evaluate your employer as though youwould a new employer. Emphasis should be on how desirable, stable,and secure your present job is and what the chances of promotion arefor you. You already know how well you like or dislike your job andwith a systematic review of the employer, you should be able to esti-mate the probability of the employer remaining attractive.

Promotions will depend upon your qualifications and positionsactually coming open or being created to which you could be pro-moted. You may be perfectly qualified for a promotion but if thereare no openings, nothing will happen. It is also possible you are thelogical candidate for promotion to a position you covet but you find


the time to wait for it to open is too long. You may have been prom-ised or given hints that you would eventually receive a promotion,but you always have to question how realistic this is and whether theperson making the promise can deliver. You should be able to deter-mine for yourself the internal advancement opportunities with youremployer upon reviewing your probable next steps. You must in-clude in your assessment of chances for promotion the possibility ofcompetition from others for the job or any tendencies of the em-ployer to hire “new blood” from the outside. You may also be facedwith traditional requirements of the employer that must be accom-plished before filling senior positions such as graduate level educa-tion or assignments overseas. Should you conclude that your presentemployer and job is not an alternative for you, you have a numberof decisions relative to your departure.

Parting Ways

Upon concluding that your best alternative requires leaving yourpresent employer for another, you must begin planning how to ac-complish your termination. Circumstances are so varied that themost that can be provided in advice is to describe an optimum objec-tive and issues you must confront. Your objective should be to leaveas gracefully as possible with minimal disruption to the employer’soperations and remain on good terms with everyone. If you hadcome to dislike your employer or job, you have absolutely nothingto gain by speaking your mind upon departure and best remainsilent. Careful planning and recognition that some compromises maybecome necessary should help you create a graceful departure.

Usually, you are more attractive to other employers if still em-ployed so your first problem is how to devote the time to findanother job yet fulfill obligations to the present employer. An imme-diate issue is what your employer’s reaction will be if it becomesknown that you are seeking another employer. Some insight is possi-ble by reviewing what the employer’s reaction has been when othershave 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?


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

Your Record

Your greatest employment security will be derived from the educa-tion, skills, experience, and employment record you have accumulated.The stronger and more impressive your record, the less dependent youbecome upon any one employer and the more attractive you are to oth-ers. The knowledge that you could readily find another job equal to orbetter than you presently have is the optimal form of job security.Employers evaluating applicants place great weight upon jobs previ-ously held and the level of performance, making it prudent for thoseevaluating their present job or seeking a new job to consider how futureemployers will view past experience. What potential employers will belooking for in your experience record is exactly the same as what youshould 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 duringthat period of your life. Grades, academic honors, and extra-curric-ular activities of which you are justly proud will favorably impressemployers. However, academic achievements rapidly decline in im-portance to employers and the jobs you hold and your accomplish-ments as an employee become dominant factors. Your academicrecord will help you land your first job and possibly influence yoursecond but expect little mileage thereafter. The decline in importanceof an academic record argues well for those with a mediocre recordas successful performance on jobs takes precedence on their resume.

Knowledge resulting from training and experience while holding ajob is a key element weighed by employers in employment and pro-motion decisions. The knowledge factor is of such importance thatemployees 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?


• Is this knowledge that will be valuable and attractive to otheremployers?

These are fundamental questions for you to ponder. Marketablejob knowledge is not limited to technical information but encom-passes management skills, customer and client skills, and the entirespectrum of personal relationships. During the early phases of jobtenure, an employee is usually learning and gaining new experience,but at some point there is little new to be learned and the experiencebecomes repetitious. Is this a time to move on to another job or coastalong in one’s present position? This again is a matter of individualchoice without a right or wrong answer.

HOW LONG TO REMAIN ON A JOB?

How long one should expect to remain on a job is a question with-out a general or universal answer, but individuals can consider all thefactors and circumstances applicable to make informed estimates.Foremost is the question of the probable duration of the position andif there is a known end, is there any advantage to remaining until theend. Accepting a job for a specific period of time or a job with pre-determined termination date forces an applicant to begin immedi-ately thinking of future jobs and how they will be landed. Jobs ofknown duration need not be avoided if they provide satisfactoryincome and enhance one’s resume. However, most jobs do not havea precise termination date, placing the responsibility upon the job-holder to decide when to accept or seek another position.

Unless one has made a terrible mistake in selecting a job and rec-ognizes promptly the mistake and terminates, there is a minimumlength of time necessary to hold a job to convince other employersyou acquired valuable experience and proved you could successfullyperform the job. Whether this minimum is months or years dependsupon the circumstances and your ability to satisfy future employersthat the time was adequate, you successfully performed the jobduties and you are justified in accepting another job. Employers tendto 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 wellyou enjoy the job. If you dislike the employer or job, it is definitely


time to move on but if you thoroughly enjoy your work and associ-ates, you have either no decision or the most difficult decision tomake. The difficult decision comes when you realize that remainingon the job conflicts with long-range career aspirations or you areoffered a much better job either with your present or another em-ployer. Further complicating the decision may be the belief that thereremains much to be learned on the job or a desire to complete proj-ects already underway. The decisions can also be influenced by thetiming of bonus payments, deferred compensation, stock options,and other benefits offered by employers with provisions designed todiscourage employees from leaving. You are continually confrontedwith the question of how long will this job I enjoy so much last. Willit end or the associates that make the job a pleasure move elsewherebefore I am ready to move?

There are some conditions that when prevalent employees shouldseriously and actively begin seeking other employment. One is whenthe job is too easy and totally lacking in any challenge and providesno job satisfaction. The job may have been poorly thought out or hasjust evolved to a point where the employee can perform all the jobrequirements in far less time than a full day. Another condition iswhen it becomes apparent the job is not important to the employerand the employer could easily do without the job. A third is whenthe employer clearly is in financial trouble or must reduce employ-ment levels. In these cases, the employee should begin seeking em-ployment elsewhere before being forced to do so. You can not expectillogical or unnecessary jobs to continue indefinitely.

Dead End Jobs

Some jobs are dead ends. These are jobs from which there is littlechance of promotion or to jobs if promotion occurred would havelimited appeal. Attractive jobs that would be desirable promotionsmay be held by veteran employees who are ensconced in their posi-tions and unlikely to move anywhere. A dead-end job may be so be-cause it is specialized and the experience prepares one for no otherjob. Jobs in isolated locations tend to become dead ends because theemployee is not exposed to executives who could influence promo-tions. Often jobs in isolated locations are difficult to fill and employ-ers find it easier to leave a promotable employee at the locationrather than seek a replacement. From the employee’s perspective, anisolated location may be away from active job markets, which makes


changing jobs difficult. Dead-end jobs are not always easy to iden-tify but clues can be found by asking what happened to others whoheld the job or similar ones. Should you accept or discover you areon a dead-end job, unless happy and complacent, you will be wise tobegin planning your next move.

Ask yourself what you expect to accomplish and what you willlearn on your next job. Is it a job you would be delighted to remainon indefinitely or is it only a step on your career ladder, or both? Ifyou are determined to advance as far as possible, remember you can-not accept any jobs that are a step backward and lateral moves areto be avoided. An employer has the responsibility to decide if you aresuitable for a job, but you also have the obligation to evaluate a joband decline if the job is not right for you.



❐ 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?



CHAPTER 12

Relocation: ConsideringCommunity Factors

When accepting a job, you also accept the community and the cost of residency.

Community factors can make a desirable job even more attractiveor impossible to accept. Even in the most demanding of jobs, youwill spend time in the community and your family will spend muchmore. The degree to which your standard of living will be affectedshould be calculated before accepting a job located in another com-munity. Increases in cost of living, housing, and transportation costscould easily offset much of what appeared to be a substantial salaryimprovement. Noneconomic quality of life activities and conditionsare as important as economic factors and for many become criticalin relocation decisions. Moving to an area with recreational oppor-tunities you enjoy or leaving a community you detest can be asimportant to your decision as views of the employer and job.

Accepting a new job in a different community can be traumaticfor you and your family if important community features are over-looked in the excitement of taking a new job. Community studies,similar to employer and job studies, require balanced judgmentbecause you cannot expect to find the perfect community. Personaland family preferences and interests will play a large part in sortingout the desirable and undesirable features of a community. A com-prehensive evaluation of an employer and job requiring relocation isincomplete without a study of the community.

Your standard for comparisons and evaluation of a communitywill be the characteristics of the community in which you presentlyreside coupled with any you are seeking or wish to avoid. The stan-dards are personal and what is best or adequate for you may bemeaningless for someone else. Your evaluation will be selective in

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that you only need to evaluate characteristics that are applicable toyou. A single person will not be concerned with the quality of thegrade schools but may have great interest in recreational opportuni-ties. The level of property taxes will be of lesser importance andunknown to an apartment renter although taxes will be included inthe rent. You should sort out community characteristics by theirdegree of importance to you and your family. The quality and avail-ability of medical care may be of critical importance to a family withserious health problems but cultural institutions such as museums ofminimal interest. Cost of living is not a major issue with a single per-son, particularly if the job requires substantial travel but it is verysignificant for married people with large families.

You will be wise to evaluate a community with the assumption thatyou will reside there for years and possibly the rest of your life. Con-ditions can always change and promises of another relocation by theemployer may evaporate or thoughts of retirement in your dreamcommunity never materialize. A long-term view requires you to re-view community characteristics not presently of concern but maybecome important in the future. If you have infant children or no chil-dren and plan to have a family, schools are not an immediate concernbut their quality and location will eventually become of paramountimportance. 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 arein the new community, you and your family will find better accept-ance by the community if you conduct yourselves as permanent mem-bers and not as transients regardless of the possibility of furtherrelocation.

Family attitudes, needs, and preferences are inescapable factors tobe considered in any community evaluation. Family members are usu-ally far more attached to their present community than the career-minded breadwinner is focused on the next job. If both husband andwife are employed, a major problem can emerge as to what happensto the spouse’s job or career upon relocation. Are similar jobs avail-able in the new community or must other types of employment oractivities be found? Under these circumstances could the marriage bejeopardized? The proximity of parents may become a major factorparticularly if they are aging and require care. Children prior to highschool age tend to accept relocation without serious resistance oradjustment problems but there can be exceptions. Family reaction cancreate conflicts that should be recognized early and quickly resolved


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

SOURCES OF INFORMATION

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

Your New Employer

The employer who makes you a job offer involving relocation hasdecided that a significant investment in you is justified. Protection ofthe investment will be aided with a trouble-free move and rapidassimilation into the community. The employer should be able toprovide you with most of the information you want. Your inter-viewers, new boss, and fellow employees live in the same communityand should have more detailed information than any other sources.

Friends

Friends who reside in the community or have previously livedthere will be a reliable source of information. However, caution isadvised with past residents because their information, while well in-tentioned, may be out of date.

The Chamber of Commerce

Almost every city of any size has a Chamber of Commerce that dis-tributes prepared material describing the community. A visit to theiroffice or a phone call requesting their publications should result inyour promptly receiving community information. They usually havevery experienced staff workers available for more detailed questions.

The Internet

All the states and most major communities have Web sites provid-ing information about their areas. Important institutions within thecommunity may also have sites worth review. Through the Internet,

RELOCATION: CONSIDERING COMMUNITY FACTORS 163

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

Publications

The Yellow Pages telephone directory is a great source of infor-mation on local institutions all arranged by type. You can quicklylearn the schools, both public and private, the churches, medicalfacilities, and so forth. The Morgan Quitno Press has a variety ofexcellent publications containing detailed statistical data on statesand cities, which provide comparisons and rankings. If the publica-tions are not found in your library, they can be purchased. The Mor-gan Quitno web site is www.statestats.com.

ECONOMIC FACTORS

There are two general categories of community factors, economicand quality of life, to be addressed in this chapter. The economic fac-tors will determine how much money an individual will retain aftermeeting basic needs and if the compensation offered for the job is areal improvement or inadequate to offset new expenses. Economic fac-tors are just as likely to make a compensation offer even more attrac-tive as discouraging, but it will take a careful study to learn the trueconditions. Care should be taken to avoid conclusions based on broadgeneralizations of individuals wanting to be helpful that may be wrongor only partially true and not fully supported by the facts. You cannotrely on statements such as, “Our taxes are lower” or “Housing is veryexpensive” without some study to determine how these expenseswould impact you. It is also critical to look at all economic factors tocalculate the net effect because the most probable condition is thatsome will prove favorable and others unfavorable. Attempting toplace a dollar value on the economic factors is essential for a realisticevaluation and calculation of the net effect. All of the factors de-scribed below can affect you to varying degrees, depending on yourstyle of living, and must be evaluated on an individual basis. A criti-cal cost item or expense for one may be unimportant for another.

Taxes

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


from state to state, while total taxes paid may differ very little. Thereare exceptions, with Alaska the most notable. State and local gov-ernments require a certain level of funding to provide basic servicesand if taxes are not received from one source, they will be derivedfrom another. Don’t be misled if a particular tax seems unusuallyhigh or low because there is likely to be another tax that offsets whatappears to be a tax advantage or disadvantage. Furthermore, theamount and quality of government services are made possible by thetaxes collected, causing the type of services you will receive fromyour government to be a factor in your evaluation. As an example,you may enjoy a low tax rate and have inferior schools or a relativelyhigh rate and excellent schools. You may find that not all taxes areapplicable, as would be the case if you did not own real estate. Othertaxes can be mitigated by where you reside, such as in a large met-ropolitan area it may be advantageous to live outside the city limitsin a suburb. To determine your tax obligation and make compar-isons, you have to estimate each tax separately to arrive at a totaland it is this total that is most important. A good place to start is toestimate in these five categories:

1. State Income Taxes: There are such substantial differencesbetween the states for rates, deductions, and provisions in theirincome tax laws that careful review is necessary. Securing acopy of the tax law will be helpful but roughing out last yearstax form gives a simple quick estimate of your obligation.Never assume the taxes in the state your moving into will beidentical to the state you are leaving. Include in your calcula-tions the benefit you receive from having state taxes deductibleon your federal return.

2. Municipal Income Taxes: Most large cities are struggling tohave tax revenues be adequate for the demand for services anda few have installed city income taxes. These taxes may be dueif you reside in the city or live outside the city but your placeof employment is in the city.

3. Property [ad valorem] Taxes: Although real estate is the mostvaluable asset taxed, any other personal property may be taxedunder these laws if the state elects to do so. To estimate yourproperty tax obligation, you must learn the rate of taxation, theassets included and excluded, and what deductions if any areprovided. Once you know the provisions of the law, you shouldreview assets you have or expect to acquire that are taxable. Pay


particular attention to the inclusion or exclusion under theselaws of valuable assets such as automobiles, boats, and com-puter equipment. Ad valorem taxes engender continual contro-versies over the value of assets and the methods of collectionand enforcement, all of which are subjects worth reviewing.

4. Sales Taxes: Sales taxes can be stealth taxes in that they are col-lected in small amounts and you may not realize the total paidduring the course of one year. The total can be a very largenumber. Sales taxes vary from state to state and can varywithin a state, making it necessary for you to learn the taxrates in the community in which you will reside. In makingcomparisons and estimates, you need to know the items thatmay be excluded from sales taxes, such as certain food items,medical care, or any other categories. Some sales taxes can beavoided with out of state purchases or on the Internet, but oneshould not assume these options will continue indefinitely.

5. Specialty Taxes: There are other possible specialty taxes thatare troublesome but probably too small to influence your jobdecision. Gasoline taxes vary substantially from state to state.Automobile licensing fees can be expensive and there may belarge fees for reregistering your automobile in the state.

Housing Costs

Your cost of housing will be determined by the combination of res-idential costs in the area, availability of housing, and your personalhousing requirements. Personal needs and preferences will predomi-nately influence the type of residence and location within the com-munity. Your present residence will probably establish the minimumquality home that is acceptable since few would be willing to relocateonly to suffer a reduction in their style of living. The location and typeof home you select within a community will largely influence the cost.As a result of the wide variations in prices between locations withina community, most statistical data on a metropolitan area as a wholewill prove to be of limited value. You may find a job in a small townwhere residence costs are generally less but where the choice of avail-able housing is also less. It is far more probable that your job will bein a metropolitan area where choices are broad.

Often during relocation the new employee is under family pres-sure to quickly find a home but the demands of the job leave limitedtime for “house hunting.” The search can be expedited if the basic


decisions are made such as whether to lease or buy, what the size ofhome should be, and what are acceptable school districts. Then aprofessional realtor should be assigned the task of finding residencesto inspect that meet your specifications. Remember, realtors repre-sent the seller and themselves and some are more able than others,making it imperative that a competent individual provides you assis-tance. A recommendation from the employer is helpful and the real-tor should have more incentive to perform if the employer is seen asa source of continuing referrals. It is wise to seek the advice of asmany individuals as you can prevail upon for their opinions on everyaspect of housing. In all communities, you will find housing andtransportation costs closely linked. As a general rule with manyexceptions, the further you live from your job, the less will be yourhousing costs but the greater your transportation expenses.

Transportation Costs

Transportation costs to and from your job should be evaluatedboth in terms of actual cost and time involved. Costs may include per-sonal automobile expenses, train or bus commuting costs, and park-ing fees. Time is how many minutes or hours will be spent in one formof commuting or another. Costs are relatively simple to calculate butthe value placed on time lost commuting is up to each individual andrequires decisions on the lifestyle that one is prepared to accept.

Cost of Living

Determining whether your cost of living will increase or declineafter relocation requires a review of statistical data, anecdotal evi-dence, and judgment. With the best of information, you are unlikelyto end up with a precise answer but should have a general indication.Statistical data on the region may be of some value and will providean overall view. However, four major cost of living components—food, housing, transportation, and medical costs—are best evaluatedseparately because their importance varies so much with each individ-ual. Food cost statistics can be confirmed or questioned by a few vis-its to the supermarkets by the family member who normally shops forgroceries. In metropolitan areas where competition is intense, foodcosts will usually be found to be lower than in small communities.

Your cost of living can be affected by items that are easy to over-look. Insurance costs and particularly automobile premiums have


significantly large variations between communities. The differencebetween automobile insurance premiums in a small town and a largecity can be staggering. Property insurance premiums also vary and insome areas flood insurance is a prudent investment. Utility costs canpresent a surprise when you receive your first bill. Charges are basedon local rate structures and the amount of service provided, which isaffected by climate. Heating and air conditioning expenses will usu-ally be the largest items. Automobile expenses for fuel, servicing, andrepairs will eventually be encountered and may be reasonable or ashock but unlikely to affect a relocation decision.

Medical

You should first be concerned with the quality of medical careavailable and then the expense. An employer willing to relocate youis almost certain to have a health insurance program, and your taskis to study the plan to learn of exclusions, deductions, limitations, andomission of any family members. Whatever is not covered couldbecome your expense. Should you or any members of your familyhave serious preexisting medical conditions with the potential of re-quiring expensive care, you should disclose the information to youremployer and verify you will have coverage. Unfortunately, if you ora family member has medical conditions with a high probability ofcreating 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 criticalissue if you have preexisting conditions or as you advance in age. Forthe patient, selecting a care provider is a gamble and never with 100percent certainty a cure will result, the condition mitigated, or nomistakes made regardless of whom you select. However, your oddsfor receiving optimum care are much better with some physiciansand 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 thecaregivers and some to economic factors. Not every institution canjustify or afford all the expensive diagnostic equipment availabletoday. The best medical specialists congregate where there are a suf-ficient number of patients needing their attention and where otherspecialists of stature practice. If you or your family requires special-ized care, you will want to make contact with a source before relo-


cating. If you do not have an urgent problem, you should not delayafter relocating the identification of a quality caregiver and becom-ing a patient. Convenience of care is also a factor to consider, par-ticularly if you reside in a remote area. The time involved in travelto your caregiver in emergencies or for treatment of ailments requir-ing frequent visits cannot be overlooked. The proximity to a teach-ing hospital can be important because the most advanced therapiesare offered there for serious and chronic medical problems.

QUALITY OF LIFE ISSUES

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

Climate

Whether or not the climate of the community one is leaving or towhich one may move is a factor in the job decision is totally an indi-vidual matter. Some prefer warm climates free from winter stormsand others just love winter weather. Some prefer dry climates whileothers have no problems with rainy communities. The change of sea-sons is important to many but others could care less. Climate has amajor effect on the type and availability of outside activities. In anycontemplated move to a new community, don’t overlook climate inyour decision.

Education

If you have an interest in continuing your education, then theavailability of local courses can be an attractive but usually not adeciding factor in your job decision. If married with school age chil-dren, then the availability of suitable public or private schools be-comes a critical factor. Regardless of how desirable the job, fewwould be willing to relocate their children to schools inferior to


where they are presently enrolled. In a small community, there willbe little or no choice of schools, but in a metropolitan area there arewide choices but narrowed by the neighborhood in which you selecta residence. Schooling is of such importance that it is common tofirst select the schools and then a residence in order to qualify foradmittance. If you elect to have your children attend private schools,residence is still important because of the necessity of transportingchildren to and from school.

The choice between public, private, or home schooling constitutesa major decision for the parents. A combination of parent’s finances,education, philosophy, religious convictions, and greatly by what isavailable locally, influences choices. Enrolling in superior privateschools may be difficult because of entrance requirements and longwaiting lists. Evaluating schools involves asking the opinions ofeveryone who may have knowledge, but your evaluation cannot beconsidered complete without an actual visit to the schools.

A college or university located in the community offers manyopportunities to residents who are not full-time students. Most haveprograms of continuing education, with both credit and not-creditcourses, for local residents and convenient evening and Saturdaycourse schedules. Colleges have found a demand for courses thatalso constitutes a profitable utilization of facilities and faculty. Theinstitutions are sources of entertainment with sporting events, the-atrical productions, and seminars. Every employer in the communityshould have information on the programs offered and may presentthe information as an added inducement to applicants.

Religion

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


you meet during visits. Joining a church, even for those withoutstrong religious convictions, continues as one of the best ways tomake 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 overwhelminglydominated by a religion other than yours. If your religious beliefs arenot considered mainstream, you may have difficulty finding like-minded people with whom to associate. You may even find yourselfshunned in the community if you are too vociferous with your views.The more common problem is relocating to a community in which thepreponderance of the population is of a religion other than yours,although yours would generally be viewed as mainstream. If this con-dition exists and particularly if you have a family, this may become acritical factor in your decision to accept or reject the job. Prior toaccepting the job, try to identify others of your faith and learn of theirexperiences in the community and to the extent, if any, that discrimi-nation or intolerance manifests itself. Failing to identify someone withidentical convictions, you should not hesitate to explore the issue withyour interviewers. As much as most would like it to be, this is not aperfect world free of religious intolerance. If it is a problem in the com-munity, identical problems may exist within the employer’s organiza-tion. See Chapter 9, Cultural Factors.

The Arts and Intellectual Activities

The presence of cultural institutions dedicated to the performingarts or general intellectual improvement of the community can beattractive assets not only to attend but also for participating in. Relo-cating to a new community involves severing frequent contact withold friends and the time and effort to make new friends. Attendingtheater and visiting libraries, museums, and zoos are for most anenjoyable time-consuming experience, and these institutions usuallywelcome volunteers, presenting the newcomer with an opportunityto make new friends with similar interests. Most communities havediscussion group organizations that can be fun and serve as anotheropportunity to assimilate into the community.

Recreation

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


and climate greatly influence the type of convenient recreational activi-ties, but with the mobility and transportation options available todayfew are totally excluded from any variety. The demands of a new joband stress of relocating will probably preclude extensive recreationalactivities for some time after your move, but you should know youroptions once you do have time. The factors of how much time you canmake available for recreational pursuits and the intensity of your inter-est should enter into your evaluation of recreation. A person may enjoyhunting and fishing but would not want to be involved every week. Onemay like hiking but not every day.

Environment and Climate

The community environment may be important for two primaryreasons, health and overall concern or philosophy. If you or familymembers have any medical conditions aggravated by air pollution,then relocating to a metropolitan area with high levels of pollutionsuch as Houston, Los Angeles, or other large cities may be impossi-ble to consider, regardless of the appeal of the job. Climate can alsoaggravate or improve medical conditions directly affecting the jobdecisions. The chances are high that anyone with a medical condi-tion seriously affected by the environment or climate is well aware ofthe problem and it will be a major factor in any relocation decisions.

Individuals with strong views on environmental issues or are ac-tive in any of the environmental movements would be wise to learnof both their employer’s views and conduct before relocating.

Similar Interests

After relocating, you will want to associate with people of similarinterests. Obviously, the larger the metropolitan area, the greater willbe the probability people with similar interests are present, but thatdoes not necessarily mean they can be readily identified and friend-ships follow. However, with a little effort, identification should notbe difficult. Many private and for-profit organizations exist for sin-gle people to meet and develop relationships. Clubs and organiza-tions flourish for those interested in special activities and there is anendless variety, sports teams, bridge and other card clubs, ski clubs,travel clubs, book clubs, discussion groups, volunteer service organ-izations, and political groups, to name only a few.


LOCAL STATUS OF EMPLOYER

The economic importance and reputation of the employer in thecommunity can influence your reception into the community. Asmall- or medium-size employer in a large metropolitan area attractslittle attention and probably remains largely unknown unless theorganization or its owners become involved in well-publicized activ-ities, usually improprieties of some sort. Only the largest of employ-ers and their most senior executives receive public attention in majormetropolitan areas. However, in small communities where the em-ployer is dominant and the area’s economic health is dependent uponthe fortunes of the employer, the community takes an interest in allof the employer’s activities. If the business enjoys good relations withthe community, new management personnel and their families relo-cated from another area may be greeted as celebrities and welcomedinto the community. If community relations are not positive or majorchanges in the business are contemplated that would reduce employ-ment levels, the newcomers may receive a chilly reception.

Anyone relocating with an employer dominant in a small commu-nity should realize that if the employment relationship proves unsat-isfactory, finding a different job will almost certainly involve anotherrelocation. Other suitable job openings are unlikely to exist locally,but if they did your prior experience with the dominant employermay preclude you as a candidate. If the community is not near amajor metropolitan area, just seeking another job will be more diffi-cult because of the travel requirements.

Every major employer can site examples where employment deci-sions were effected by community factors. Applicants readily ac-cepted jobs because of the community or declined because of thecommunity. Employees quit to accept jobs in another more attractivecommunity. The most disturbing and costly for all involved is whenan applicant accepts the job and relocates only to conclude withinmonths he or his family could not adjust. Usually the undesirableaspects of the community were well know in advance but the appli-cant or his family rationalized the problems could be overcome butit did not happen. Never underestimate community problems in yourenthusiasm for a job offer.



❐ Overall, how do you compare your present community withthe one to which you are considering relocating?

❐ What is your family’s attitude toward relocating to a new com-munity?

❐ What taxes are you subject to and how do they compare withthose 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 em-ployer believes is adequate to attract a qualified applicant. You mayfind an initial offer to be acceptable, deficient, or unacceptable, leav-ing you a choice of accepting the offer, rejecting it and seekinganother employer, or attempting to negotiate improvements. What-ever is first offered reveals the employer’s attitude and general phi-losophy regarding compensation and is the amount the employerprefers to pay. A very low offer may be evidence that the employer’sentire wage structure is not competitive. Negotiated improvementsto a first offer can satisfy your personal requirements, but there maybe 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 beingpaid than someone had originally planned. An applicant desiring toimprove an offer can be most effective by providing the employerwith a rational as to why the offer should be increased, not just tak-ing the position of, “I want more.” Elaboration on past accomplish-ments and expressing confidence in meeting job objectives canbecome impressive arguments. As examples; “I have a following ofcustomers and always exceeded my sales targets. While yours are achallenge, I see no problems.” “I have always managed within mybudgets both in expense control and meeting production schedules.”

An important part of your evaluation of an employer is gaining anunderstanding of why you were offered whatever you were offeredand the degree of flexibility the employer has in its compensation sys-tem. When you accept an employer’s offer, you are also accepting theemployer’s system of compensation, which may prove to be the ladderto prosperity or a financial straitjacket. To conduct your evaluation,

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you require insight into how the employer thinks and basic informa-tion on the entire compensation system.

COMPENSATION PHILOSOPHY

Every employer has a general compensation philosophy that isreflected in hiring practices throughout the organization. This maybe a formalized written policy or unwritten but with everyone awareof management attitudes. For a short time, an employer may nothave a policy or a policy is undergoing revision as may occur duringan ownership change or with a new chief executive, but this is achaotic situation that will not endure indefinitely. Most compensa-tion plans are keyed to what an employer believes is competitivewith competitive or “going rates” determined by reviewing surveysof what other employers pay, anecdotal evidence such as rates thatapplicants request, or the demand of current employees to remainwith the company. It does not take long for an employer to realize aproblem exists when employees are leaving for higher-paying jobs orapplicants are rejecting offers as too low. Compensation adequate toattract and hold employees is a far more important factor in anemployer’s decisions than the ability to pay. Should an employerclaim ability to pay is limiting an offer, you had better review thefinancial viability of the organization before making a final decision.However, claims of inability to pay usually refer to conflicts withwhat current employees are paid rather than with the overall finan-cial health of the organization.

An employer’s philosophy may be to provide compensation higherthan competitive rates in the belief that higher rates will attract ahigher caliber of employee and costly turnover will be minimized.Other employers may believe paying at a competitive level consti-tutes fair compensation for their employees, and as long as they canstaff their operations without difficulty they will simply equal thelabor market competition. A few employers will attempt to compen-sate employees at levels below competition, but this practice usuallycannot be sustained. Some employers will bypass their establishedcompensation plan and pay whatever is required to employ a partic-ularly attractive applicant or someone who has desperately neededskills. Usually, the employer goes to great lengths to keep the com-pensation for the highly paid employees a secret for fear of irritatingother employees. Most employers have learned the internal relation-ships differentiating levels of compensation can create more conflicts


than the actual amounts paid. A simplified example of the impor-tance of internal relationships would be for you to imagine yourreaction if you learned a fellow employee working next to you per-forming essentially the same job was paid 25 percent more than you.

The larger the employer, the more likely the employer will have acomprehensive compensation program with limited exceptions pos-sible. However, in even the largest of corporations with formal salaryadministration systems, enterprising managers can usually find somemeans to accommodate the needs of valuable employees or equitablyhandle unforeseen special situations. Small employers and new com-panies without a formal compensation system tend to have flexibil-ity to develop unusual compensation agreements when necessary toattract desired employees. As a general rule, the more senior theposition, the more flexible the employer is in negotiating compensa-tion. An employer attempting to employ a new vice president willprobably be very flexible when negotiating with a coveted applicantand mainly be restricted by concerns over how the compensationwill compare with other senior executives. Applicants for lower-levelpositions easy for the employer to fill will find employers have littleinclination to negotiate and the compensation is predetermined bythe established system.

Employers tend to view compensation costs in their entirety andnot just the individual components. Employees and applicantsshould also look at total compensation but most place too muchemphasis on the wage portion. A dollar spent for employee healthinsurance has the same impact on profitability as a dollar spent onwages. However, a dollar committed to be spent on wages is a morecertain obligation than a dollar that may be earned under a bonusplan, payable only if certain performance goals are achieved. For anemployer, there are two types of compensation costs. One is certain,such as wages, and the other is variable, such as commissions, stockoptions, and bonuses. The result is that an employer must make fun-damental policy decisions regarding the portion of all compensationcosts allocated to fixed and variable cost items. Variable costs canonly be estimated in advance but they are usually structured so thatif the employee fairs well, the employer does extremely well. Theemployer’s decisions will be influenced by a variety of factors but themost important will be overall compensation philosophy, internalrelationships, and what it expects to be accomplished. An offer madeto you will be a good indication of the overall compensation deci-sions and policies of the employer.

COMPENSATION 177

SALARY STRUCTURE

Established employers will have developed a wage and salary planranking jobs by order of importance. While there is much similarityin employer ranking, they are by no means uniform. Associated withthe plans are salary administration procedures and policies that willlargely govern your compensation should you become an employee.In most organizations that have a human resources department, thisdepartment will be assigned the responsibility for creating and ad-ministering the compensation programs. Knowledge of theemployer’s plan will not only help explain the logic of any offerreceived but also provide insight into the probability, amount, andtiming of wage increases once employed.

Salary structures are created by first identifying all the jobs andjob vacancies in the organization and assigning a title to each. Jobtitles identify the jobs, but as was explained in Chapter 7, The Job,an identical job title may describe a very different job in anotherorganization. Job titles and actual job duties could be similar in dif-ferent organizations but responsibility and compensation very dif-ferent, as would be the case with a comptroller in a small business asopposed to one in a very large business. It is common in most formalplans for a general description of the job duties and responsibilitiesto be written for a permanent record. If a job changes sufficiently, anew description will be written and possibly reassigned in the ratestructure. Relatively similar jobs would have the same titles such assalesperson, accountant, or computer programmer at the entry levelbut as more senior jobs such as comptroller, sales manager, or chiefengineer are described, they only refer to the job of one person.

After the jobs are identified, they are ranked in order of impor-tance and slotted into classification levels (sometimes referred to asCLs or labor grades) that set the minimum and maximum amount ofsalary the employer will pay for a job. Equitable ranking and slot-ting of jobs is a challenge for any management and always remainsto some degree a subjective exercise regardless of efforts to createsystematic evaluations. Numerous job evaluation plans have beendevised in an attempt to quantify and award points for such factorsas education required, complexity of the job, and overall responsi-bility, with the total scores used to determine the ranking and slot-ting into the classification level. While well-constructed formalevaluation plans are far better than arbitrary management assign-


ment, they do have problems. The most troubling is competitivemarket conditions that force payment of salaries above what the jobis deemed to be worth under the evaluation system. Conflicts of thistype 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 arebeing made with supplemental compensation payments such as sign-ing bonuses, extravagant relocation allowances, and stock options.

While the ranking of jobs and their assignment to a classificationlevel remains stable, the rate structure can and does change becauseof competitive pressures, market conditions, and living costs. Theminimum and maximum for each classification level is establishedwith the minimum of a classification level, the lowest wage theemployer will pay for a job ranked into that classification level, andthe maximum the highest. Numerous classification levels are created,continuing an upward progression until salary ranges for seniorexecutives are delineated, although the formal structure in someorganizations may stop before the senior level. It is common for amidpoint of each classification range to be established and oftenrestrictions are placed on exceeding the midpoint. The midpoint mayhave added significance when management believes it to be a fair (intheir mind) competitive wage and only superior performance de-serves higher pay. While the general concept described above isnearly universal, standardization of plans is nonexistent and eachemployer has its own. The number of classification levels, the degreeof overlap of the classification levels, and breadth of each rangebetween minimum and maximum are at management’s discretion.

Armed with a general knowledge of salary structures and possibleadministrative policies, you are in a position to ask a series of ques-tions the answers of which will be helpful in your evaluation:

• What will be my job title and to what classification level is itassigned?

• Where does the job offer fall within the rate ranges for my clas-sification level? If near the minimum, there should be room forwage increases even if you remain on the same job. However, ifyou have aggressively negotiated and have an offer near themaximum for the classification level, wage increases may berare and difficult unless you are promoted to a higher-level job.As an example, if you are offered a starting salary of $3500 per

COMPENSATION 179

month and the classification level to which the job is assignedhas a range from $2900 to $3700 per month, you can readilysee your only hope for major improvement in wages is througha promotion.

• What is the usual period of time before and between salary re-views? At the time you receive a job offer, you will want to knowhow long you must wait before your performance will be re-viewed and you will be eligible for a wage increase. Many em-ployers volunteer this information with their offer, but if they donot you should ask. Employers most commonly review salariesannually but may have more frequent reviews for new employees.Some attempt to separate performance reviews from salaryreviews, but programs of this type rarely have long-term success.

• Does the employer have policies restricting the amount and fre-quency of wage increases? If an employer restricts wage in-creases to a designated percent of present salary, you can easilycalculate the maximum wages you could receive at a future dateif you also know the policy for frequency of increases. Someemployers may have policies that differ for new employees oremployees below the midpoint of their classification range.

• Just how formal and rigid are the employer’s compensationpolicies? As an applicant, you are unlikely to receive a completeanswer to this question, and the employer may not know untilconfronted with the choice of deviating from policies or losingan important employee. Only after you have been employedwill more information become available either to your delightor dismay. Detailed written policies may exist but through cus-toms and changing conditions the policies may be superseded.Not all employers will have formal salary administration pro-grams, but you can be certain unwritten policies must exist thatare generally followed. A good question to ask when compen-sation policies are described to you is, “How often are excep-tions made?”

• What are the employer’s approval procedures for wage in-creases? If employed, information on the discretion and author-ity your immediate supervisor has to grant or withhold wageincreases will give you an indication of your chances of receiv-ing increases. For most employers, an immediate superior’s rec-ommendation of wage increases is mandatory but how manyothers must then approve is the issue.


WHAT WILL HE OR SHE COST?—THE EMPLOYER’S RATIONALE

In one form or another this is the question management continu-ally asks. You are likely to learn one answer in the form of a job offerbut will not be participating in similar questions unless you becamepart of the employer’s management. A primary responsibility of themanagement of every organization, both profit and nonprofit, is toconserve the assets and control costs. Compensation of employees isan expense to be controlled with managers at all levels sharing in theresponsibility. Managers are praised and their promotion chancesinfluenced for controlling expenses of which wages is usually a sig-nificant item; they are not given bouquets for overpaying employees.

However, wide variations may exist within an organization as tothe zeal with which individual managers work to contain compensa-tion costs. All managers are involved with each regulating the com-pensation of their subordinates and the irony of the situation is thatthe cost control obligation also limits the compensation of thoseexercising control over others. (Cost control enthusiasm seems tostop somewhere below the most senior executive level as evidencedby the explosion in executive compensation for CEOs.) Managersare motivated to control compensation of subordinates by the well-established principle that subordinates should be paid less than theirboss. While the amount of differential may vary among organiza-tions, the principle affects everyone. Starting at the top, the CEOmakes certain all reporting to him are paid less and they in turnapprove a lower level of compensation for their subordinates and thepractice continues on down through first-level supervisors. A fewCEOs effectively influence all wages by keeping the salary portion oftheir compensation relatively low. If the employer is a public com-pany, you can look in the proxy statement and learn exactly the com-pensation of the officers.

The range between the minimum and maximum wage rates foreach classification level typically are narrow for the lower classifica-tions and then progressively become wider with the widest for thesenior executives. Consequently, the room for a manager to drive ahard bargain and negotiate a low starting wage with an applicant fora lower-level position is limited. The manager making offers to appli-cants for entry-level positions may have no discretion in startingwages, with an unvarying starting wage predetermined by others.

COMPENSATION 181

However, applicants for more senior positions will find the employerhas discretion to negotiate compensation and that discretion or flex-ibility increases with the importance of the job. Eventually, the em-ployer’s target negotiated offer for a highly sought after applicantmay be characterized as ranging between “paying the least the appli-cant will accept” to “paying whatever it takes.”

Once an employer decides to make an offer to an experienced ap-plicant the basic question of, “What will he or she cost?” is heard.There are two primary factors that will be considered to answer thequestion:

1. The applicant’s compensation history with emphasis on thecompensation for his last or present job

2. How an offer would compare with the compensation of em-ployees with similar job status already employed

If you wonder how an employer arrived at an offer made to youor you are involved in negotiating a compensation package, youshould assume the above two questions largely influenced the em-ployer’s positions.

The level of compensation you have achieved in your present orlast job will greatly influence the thinking of employers in formulat-ing offers. It would be an unusual and imprudent employer whomade an offer to an experienced employee without knowing his pastand present compensation. Employers realize they cannot expect toentice an employed individual into accepting a job offer unless theoffer provides compensation greater than presently earned. Employ-ers also believe that an unemployed person anxious to find a job mayaccept an offer less than paid on his last job, but the probability ishigh he will not remain long on the job. The precise amount of com-pensation that must be offered over and above an applicant’s presentcompensation to be attractive is a judgment call without guidelines.The level of increase necessary may be debated within the employer’smanagement group, and the applicant may eventually be queried asto his requirements.

An applicant can find himself in a difficult position when asked ofhis compensation needs because the employer already knows whathe would prefer to pay. If the applicant’s request is lower than theamount the employer is prepared to pay, the employer accepts. If theapplicant’s request is higher, the employer can attempt to negotiate alower compensation package. Either way, the applicant loses. A


good response for an applicant is to request compensation compara-ble to what others in the organization of similar status and respon-sibility are paid.

As an applicant, it is unlikely you will be aware of what otheremployees are earning that are on a level comparable to the job youare evaluating. However, the employer is very much aware of every-one’s compensation and the necessity of compensating a new em-ployee at a level consistent with what established, proven employeesare paid. Few actions could offend present employees more than tolearn a new employee of similar rank was employed at a higher rate.Under no conditions will a new employee be employed at a rategreater than paid his immediate superior. The internal relationshipsare of such importance that an employer may find it impossible toemploy a desirable applicant. Should this be the case, the soonerboth the employer and applicant recognize there is no solution andgo their own ways, the better.

ELEMENTS OF COMPENSATION

The following is a list of the more common elements of compen-sation for use in evaluating a job offer. The list serves as a checklistof compensation benefits. If any are omitted from a job offer, youshould inquire of the employer’s policies, which may separatelydescribe benefits. Evaluating an offer involves looking at the offer inits entirety and not just the wage portion or some other attractive ordistasteful feature. Along with this list are supplemental explana-tions and questions, but whenever possible you should request writ-ten descriptions of the plans or benefits. Some plans are complex andyou should never be shy in seeking an explanation. As an example,it is not enough to know a benefit plan exists, such as health insur-ance or a pension plan, because in the details either plan may proveto be generous or minimal and of little value.

The list only covers the more common methods of compensationand benefits and does not purport to be all-inclusive. You can be cer-tain that if an employer has a unique benefit program or programsthat are extremely generous, you will learn of them during the em-ployment process.

Wages: The amount received in periodic payments of cash is fornearly all employees the most important part of their compensa-tion. Usually as long as you are employed, you will continue to

COMPENSATION 183

receive a base wage. Knowing the starting wage is important butyou also should learn when increases are promised or likely to begranted and under what conditions or guidelines.

Bonuses: Bonuses are payments in addition to wages when the em-ployee, a unit of the organization, or the entire organization ac-complishes designated objectives. The amounts may be calculatedwith a predetermined formula or simply at the discretion of manage-ment. Some are just calculated and paid as a matter of custom, suchas year-end or Christmas bonuses. If included in your job offer is apromise of a bonus, you should definitely inquire as to the amountyou could receive and the employer’s past history of bonus payments.

Commissions: Commissions are payments based on individual per-formance with the level of performance directly affecting theemployee’s compensation. They usually are amounts paid for thesale of products or services of the business. Employees eligible forcommissions may receive a base wage or a draw (a draw is essen-tially a loan to be paid off from commissions as earned) or theircompensation may be limited to commissions. The success of anycommission plan will be dependent upon both the ability of theemployee and the attractiveness of the products or services for sale.

Overtime Pay: Senior executives and managers expect to work what-ever hours are necessary without overtime payments and areexempt from overtime pay. Employees in less skilled and respon-sible jobs must receive overtime pay at the rate of one and one-half their hourly rate for hours worked in excess of forty hours perweek. The federal wage and hour law precisely defines this obli-gation. However, many employers provide overtime payments toemployees although not required by law to do so, and these pay-ments can become a significant part of an employee’s compensa-tion. Some employers do not make cash payments to exemptemployees 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 paymentswill continue indefinitely.

Vacations: Vacations are paid time off for rest and rejuvenation. Atleast that is the theory but how much rest occurs is problematical.The amount of vacation granted is based on length of service, andas an applicant you will want to know when you will be eligiblefor a vacation and the amount. You will also want to know theemployer’s requirement for taking vacation and if vacation timenot taken is reimbursed or can be accumulated from year to year.


Health Insurance: The provisions of an employer’s health insuranceprogram should be carefully reviewed to determined if you believethe coverage is adequate for you and your family. The amount ofbenefits in any plan is a direct function of the amount of premi-ums paid, and health insurance costs are of a magnitude that theycan present a serious problem for an employer. In addition to eval-uating the benefits, you will want to know as a new employeewhen the coverage becomes effective. What coverage is providedfor dependents? What portion and the monthly amount, if any, ofthe premium are employees required to pay?

Life Insurance: Life insurance provided by an employer will be terminsurance that you will lose if you leave the employer. There prob-ably will be provisions to convert the insurance to your personalownership upon termination but it will be with a much-increasedpremium.

Sick Leave: Sick leave benefits continue your wages when you areunable to work because of illness. Many employers have formalpolicies granting a specific number of days allowed per year thatmay or may not be accumulated from year to year. Sick leaveplans may be dovetailed with insurance disability benefits thatbecome payable for long-term illnesses or in the event of perma-nent disability.

Pensions: Pension are monthly benefits usually payable for life, com-mencing upon retirement, and are structured as a reward for longservice with the employer. Pension plans with defined benefits usu-ally have the benefits payable calculated with a formula, incorpo-rating years of service and wage level. If you intend to remain withthe employer until retirement, you should obtain a copy of theemployer’s plan and study it carefully. The plans are often com-plex and you may need assistance from your employer or an inde-pendent expert to explain possible benefits and limiting provisionsthat may prevent you from receiving benefits. Assuming currenttrends continue, any plan you study today is almost certain to berevised or supplemented by another before you retire.

401k Plans: These plans have become increasingly popular often re-placing more traditional defined benefit pension plans. Under a401k plan, each employee has an individual account to which boththe employee and employer can contribute. The money in eachaccount is pooled into an account controlled and invested by a trust.Employers like the plans because they know exactly what their costsare and employees like the plans because they accumulate a nest egg

COMPENSATION 185

they can take with them if they change employers. Employees haveconsiderable discretion as to the amount they wish to contribute tothe plan. They will be wise to decide upon their contribution levelafter they review the investment performance and credentials of thetrustees investing their money. The plan provisions and administra-tive practices governing withdrawals of funds also should be stud-ied because withdrawals are often restricted. Most 401k money isinvested in the stock market with results varying widely. Some of theenthusiasm for 401K plans diminished when employees learnedupon receiving their year 2000 statements it was true that the stockmarket could go down as well as up.

Stock Purchase Plans: Many employers that are public companieshave employee stock purchase plans permitting employees to buystock, usually through payroll deductions, of the employer withoutusing and paying a broker and sometimes at a discount from themarket price. The stock is fully registered and becomes immedi-ately the property of the employee who can sell it anytime. Assum-ing 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 estab-lished under government regulations for employees to purchase orearn shares of their employer’s stock. In most cases, the employer isnot a public company, making it nearly impossible for an employeeto sell any shares accumulated in the open market. The regulationsemphasize the plans must be for the benefit of the employees but themotivation to establish an ESOP plan is almost always to benefit alarge shareholder of the company. Under an ESOP plan, a trust iscreated that purchases a block of stock with borrowed fundsrepayment of which is guaranteed by the company. The company isthen permitted to make annual contributions to the trust as a pre-tax expense to use to retire the loan. The shares eventually can bedistributed to employees. Employees to receive value for the sharesmust sell the shares back to the trust or hope the company is sold.No one evaluating an offer of employment should place much valueon an ESOP plan without substantial investigation.

Profit Sharing: Profit sharing involves allocating a portion of theenterprise’s profits to employees. If you are told you will partici-pate and receive a share of the profits, it is fair to ask what thiswould have amounted to in prior years. Profit sharing is subject tomanagement discretion, including the amount shared, who partic-ipates, and the formula for allocation of funds.


Automobiles: An automobile or an equivalent automobile allowancecan be a valuable part of a compensation offer. Because of possi-ble tax difficulties for the employer when an automobile is fur-nished, many simply provide an allowance and let the employeepurchase an automobile and deal with the IRS. In some busi-nesses, the type of automobile furnished is dependent upon thestatus of the employee.

Parking: If you will be working in an area where parking space isscarce and fees are charged, you better learn before accepting ifyou will have a parking space and who pays the fees.

Relocation Expenses: Most large employers have relocation policiesthat all or partially cover the expense of relocation. These ex-penses can be formidable, including such items as moving costs,sale of real estate, and living expenses until relocated. Smalleremployers may not have a well-developed policy making it neces-sary for you to negotiate the expenses to be reimbursed.

Signing Bonuses: If you possess scarce skills in great demand, youprobably are well aware of the practice of employers paying abonus for others with similar skills to join their organization. Theamount of bonus and the terms of payment can vary from em-ployer to employer.

Stock Options: Stock options are the rights to purchase a certainnumber of your employer’s shares at some point in the future.When the options are granted, they are assigned a price per sharethat is above the current market price and will only have value ifthe market price becomes greater than the option price. If theemployer is not public, its board of directors can approve a rea-sonable price they believe would be the present market price.Determination of the market price in a private company is a sub-jective exercise and often controversial. If the employer is privateand plans an initial public offering (IPO) and fails to do so, theoptions will probably become worthless unless the employer issold. The option holder is prohibited from exercising his optionsfor a set period of time and must exercise the options by a setfuture date. As an example, an option holder may be prohibitedfrom exercising his options for two years but must exercise themwithin four years.

Stock option plans are complex documents written by attorneysthat must be approved by the shareholders. Nearly all plans con-tain provisions that should an employee terminate prior to hisoptions becoming exercisable, he will lose the options. Another

COMPENSATION 187

standard provision is if the employer is acquired, all options can beexercised. Wide variations can exist in the plans and familiarity witha certain plan does not make you knowledgeable about anotherplan. There is little chance to negotiate over the text of the plan butthe number of shares and time limits often can be negotiated.

Many have made large fortunes through stock option programsbut many that you hear little of have been disappointed to learntheir options were worthless. The company’s shares have toappreciate substantially for the options to have real value andsuch appreciation may not occur. The tax consequences also haveto be considered. If you exercise your options and promptly sellthe shares for a profit, the income is taxed as regular income, thesame as your wages. To receive the capital gains rate, you wouldhave to hold the shares the required length of time and that maybe both risky and impractical.

Maternity Leave and Benefits: The extent of maternity benefits andleave provided can be a deciding factor in accepting employment forwomen who wish to have children. In addition to health insurancebenefits, the issues of time away from the job with pay and withoutpay that is permitted must be evaluated. Pregnancy leave policiesvary widely and it is prudent to request a copy of the policy.

Termination Pay: Termination payments, if any, for employees ter-minated from entry level or mid-level jobs probably are describedin a written company policy. Under normal conditions, it is hardlyappropriate for applicants to request information on separationpay. However, when applying for jobs of limited duration, whenemployment contracts are required or in high-risk situations, sep-aration benefits should be discussed and included in the offer pre-sented. If the employer is a candidate for sale or merger, anyoneconsidering a senior management position should know the sepa-ration benefits to be received in the event of a change of control.

Training: Training in all its forms is a type of compensation that inmany instances may prove to be the most valuable received. Train-ing expenses represent an investment for the employer and thereis only a return if the result is a more productive employee. As anemployee, training once experienced can never be taken away andconstitutes an asset for present or future employers. Don’t limityour thinking of training to tuition reimbursement programs andleaves-of-absences for academic studies. Training of great valuemay be received on the job or multiple jobs as is the case with fast-track management training programs. Job experience is of excep-


tional value when the employer has a reputation for excellenceand you have the opportunity to associate with individuals whoare experts. Training can be in formal classroom settings on theemployer’s property and taught by instructors who may or maynot be employees. However, training received every day on the jobfrom an outstanding supervisor and associates can be superior.Keep in mind training prepares you to perform and after youcomplete your training when you will be evaluated on your per-formance and accomplishments and not on the amount of train-ing you experienced.

All Factors Important: Compensation is the subject of the last chap-ter, not to diminish its importance but to emphasize the other fac-tors to be considered when selecting an employer. All too manymake the mistake of drawing conclusions about a job opportunityprimarily upon their understanding of the initial compensationlevel. 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 wageoffer may only be opening the door to many other forms of com-pensation and an opportunity to begin climbing a promisingcareer ladder. You must look at the complete picture when evalu-ating employers and jobs and only you can reach conclusions andmake decisions.

COMPENSATION 189


❐ What appears to be the compensation philosophy and policiesof the employer?

❐ Where is your job title assigned in the employer’s salary struc-ture?

❐ 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 appli-

cable 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


Numbers401K plans, 185–186

AAd valorem (property) taxes, 165–166Age-related issues, 132Allowances, automobile, 187Amortized expenses, 45–46Analysts as information sources, 33–34Annual reports, 40Antidiscriminatory legislation,

123–124Assets, employer

current, 29–31, 45intangible, 45–46

Auditor’s statements, 41Automobile expenses and allowances,

168, 187

BBalance sheets

assets, current, 45assets, intangible, 45–46components of, 44–45debt, long-term, 46–47description of, 44–45equity, shareholders’, 44–47expenses, amortized and capitalized,

45–46goodwill, 45liabilities, current, 45market capitalization, 47ratios, current, 45

BBB (Better Business Bureau), 33

Benchmark comparisons, 43Benefits

compensation issues, 175–190. Seealso Compensation

vs. wages, 177Better Business Bureau. See BBB

(Better Business Bureau)Bonuses, 184, 187Budgets, 48–50Building maintenance, 27–28Business cycles, 3Business environments, 2–3Business plans, 48–50Bypassed employees, 120–121

CCapitalized expenses, 46Careers

planning of, 151–152transitions in, 9–10

Cash flow analyses and statements,47–48

Casual interview contacts (“littlepeople”), 140

Cause discharges, 116CEOs (chief executive officers), 75–77,

83–86, 181Chambers of Commerce, 163Change of duties, 108–109Charity and volunteerism, 131–132Chief executive officers. See CEOs

(chief executive officers)Classification levels. See CLs (classifi-

cation levels) vs. job titles

191

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, 184Community-related factors. See

Relocation and community-related factors

Company position (employer). SeeIndustry and position(employer)

Comparisons, corporatebenchmark, 43industry, 44

Compensationdescription of, ix–xi, 175–176elements of

401K plans, 185–186all factors, importance of, 189automobiles and automobile

allowances, 187bonuses, 184, 187commissions, 184description of, 183–189ESOPs (employee stock ownership

plans), 186insurance, health and life, 185leaves, maternity, 188leaves, sick, 185leaves, vacation, 183–184overtime pay, 184parking, 187pensions, 185profit sharing plans, 186relocation expenses, 187signing bonuses, 187stock options, 187–188stock purchase plans, 186termination pay, 188training benefits and

opportunities, 188–189vacations, 184–185wages, 183–184

employee costs to employersCEOs (chief executive officers)

compensation and, 181description, 181–183

employee salary histories and,182–183

public vs. private corporations,181

senior vs. junior positions, 182employer flexibility and, 175–176first offers vs. negotiated compensa-

tion, 175–176key questions about, 190philosophies of

commissions, 177competitive (“going”) vs. below

market rate, 176–177comprehensive programs, 177description of, 176–177fixed vs. variable costs, 177formal salary administration

programs, 177performance-based programs, 177wages vs. benefits, 177

salary structuresadministration policies and, 179approval procedures and, 180basic questions about, 179–180CLs (classification levels),

178–179description of, 178–180increase frequencies and, 180ranking plans, 178–179reviews and, 180

Competition, internal, 127–128Competitive (“going”) vs. below

market rate compensation,176–177

Comprehensive compensationprograms, 177

Consolidations, corporate, 71–72Consultants, 85–87Corporate histories as information

sources, 20Corporation positions (employer).

See Industry and position(employer)

Cost of living, 167–168Creative accounting, 43Cultural factors

antidiscriminatory legislation and,123–124

description of, ix–xi, 123–124

192 INDEX

discovering, 125extreme factors

age-related issues, 132charity and volunteerism, 131–132college or university preferences,

133description of, 126–127glass ceilings, 130harassment and discrimination,

129–130, 132internal competition, 127–128management excesses, 127paternalism, 132–133politics, 130–131racism, 129–130recreational issues, 132–133religion and religious activities, 129sexual-related issues, 130

immediate supervisor influences,125

importance of, 133interpersonal relationships,

employee, 126key questions about, 134management style and philosophies,

124normal work environments,

125–126organizational size, 124–125traditions, 126work pace, 126

Current assets, liabilities, and ratios, 45Cycles, business, 3

DD&B (Dun & Bradstreet) reports, 56D&B Million Dollar Directory, 34D&B Reference Book of Corporate

Management, 34Dead end jobs, 157–158Debt, short-term vs. long-term, 46–47Decline of loyalty. See Loyalty, decline

ofDirectory of Corporate Affiliations

(Master Index), 35Discharge job openings

cause discharges, 116description of, 114–118discharge types, 115–116

problems associated with, 117–118unsatisfactory performance

discharges, 116–117Discrimination and harassment,

129–130, 132Disenchantment, employee, 5Duration, job, 101Duties and objectives, jobs

change of, 108–109comparisons of, 93description of, 93–97evaluation of, 96–97identifications and clarification of,

94–96specific tasks, 96–97

EEmployees

costs to employersCEO (chief executive officer)

compensation and, 181compensation, 175–190. See also

Compensationdescription, 181–183employee salary histories and,

182–183public vs. private corporations,

181senior vs. junior positions, 182

disenchantment of, 5employer-employee reciprocal

relationships, ix–xmobility of, 5personality characteristics of, 135stock ownership plans for. See

ESOPs (employee stockownership plans)

Employer informationdescription of, ix–xiemployment environments, 1–13.

See also Employment envi-ronments

financial condition, 37–52. See alsoFinancial condition(employer)

full profiles, importance of, 15–16general information, 15–36. See also

General information(employer)

INDEX 193

Employer-employee reciprocalrelationships, ix–x

Employment environmentsalternatives, evaluation of

career transitions, 9–10description of, 6–7elements of, 6initiating events, 7job search, 7negotiations, 9resume preparation, 7

business cycles, 3business environments, 2–3change, nature of, 1–2description of, ix–xi, 1evaluation techniques, 10–12Federal Reserve Bank system, 3free markets, 3frequent employment changes, 3governmental regulation, 3job stability vs. instability, 1–2key questions about, 13loyalty, decline of

description of, 4–6employee disenchantment and, 5employee mobility and, 5mergers and, 6positive aspects of, 5–6training programs and, 5turnover rates, 4

market economic system, 2–3short term vs. long term goals and

objectives, 10–12Employment process

description of, ix–xi, 135–136employment procedures

description of, 137employer’s timing, 137–138employment decisions and,

139–140employment obstacles and, 139specifics of, 138–139status of, 138

interview evaluationdescription of, 144–146good vs. poor treatment and,

144–145ideal employment process and,

145

importance of, 146negative observations and, 144poor interview questions and

techniques and, 144prompt responses and, 145schedule delays and, 145

interview process, 137interviewers

casual contacts (“little people”)as, 140

description of, 140executive and directors as,

142–143knowledge of, 143prospective superiors as, 142prospective supervisor as,

141–142psychologists as, 143salespersons as, 141screening interviewers, 141

job performance ability and, 135key questions about, 147personality characteristics and, 135points of contact, 143–144

Employment records, 155–156Entertainment and social demands,

101–102Environments

business, 2–3employment. See Employment

environmentswork space, 29working conditions, 120–121

Equity, shareholders’, 44–47ESOPs (employee stock ownership

plans), 186Evaluation techniques, 10–12Excesses, management, 127Executive and directors as interview-

ers, 142–143Exit strategies, corporate

description of, 56–57IPOs (initial public offerings),

57–58LBOs (leveraged buyouts), 58–59

Expensesamortized, 45–46automobile, 168, 187capitalized, 46

194 INDEX

Extreme cultural factorsage-related issues, 132charity and volunteerism, 131–132college or university preferences,

133description of, 126–127glass ceilings, 130harassment and discrimination,

129–130, 132internal competition, 127–128management excesses, 127paternalism, 132–133politics, 130–131racism, 129–130recreational issues, 132–133religion and religious activities, 129sexual-related issues, 130

FFads, management, 85–86Fast tracks, 84Federal Reserve Bank system, 3Financial analyses, 50–51Financial condition (employer)

auditor’s statements, 41balance sheets

assets, current, 45assets, intangible, 45–46components of, 44–45debt, short term vs. long-term,

46–47description of, 44–45equity, shareholders’, 44–47expenses, amortized and capital-

ized, 45–46goodwill, 45liabilities, current, 45market capitalization, 47ratios, current, 45

budgets, 48–50business plans, 48–50cash flow analyses and statements,

47–48description of, ix–xi, 37–38financial analyses, 50–51information sources about

annual reports, 40description of, 38–39financial statements, 38–40

Internet sources, 39libraries, business reference

sections, 44nonprofit corporations, 38–39privately held corporations, 38–39public corporations, 38sales brochures, 40subsidiaries and divisions vs.

parent corporations, 39–40unavailable financials and, 39–40

key questions about, 38, 52vs. nonfinancial information, 15private placement memorandums,

48–50profit-and-loss statements

comparisons, benchmark, 43comparisons, industry, 44creative accounting, 43description of, 40–41loss businesses, 42numerical summaries, 41–42profitability levels, 43–44restructuring losses, 42–43ROIs (return on investments),

43–44supporting data and, 38workplace and employee issues and,

37Financial promotions, employer, 71Financial statements, 38–40Financial vs. nonfinancial employer

information, 15First offers vs. negotiated

compensation, 175–176Fixed vs. variable compensation costs,

177Formal salary administration pro-

grams, 177Founders vs. current owners, 55–56Free markets, 3Frequent employment changes, 3Furniture and work spaces, 29

GGeneral information (employer)

assets, 29–31description of, ix–xi, 15–16financial vs. nonfinancial

components, 15

INDEX 195

General information (employer) cont.histories, 20image and reputation, 18–20key questions about, 15–16, 36mission statements, 21–22organization and structure, 22–23philosophies, 21–22physical facilities

building maintenance, 27–28description of, 27–29furniture and work spaces, 29parking and transportation,

28–29stand-alone facilities vs. tenant

facilities, 28vacant space, 28work environment, 29

policies and practices, 21–22potential problems

description of, 29gross profits, 30legal issues, 30–31market share, 30marketing, 20regulatory issues, 30–31total sales revenues, 30

products and services, 24–25sources of

analysts, 33–34BBB (Better Business Bureau), 33description of, 31–32importance of, 34Internet, 32–33publications, reference, 34–35publications, trade, 33SEC (Securities and Exchange

Commission), 32strategic plans, 21–22technology, status of, 25–27types of employers

description, 16–17divisions and subsidiaries, 16–17joint ventures, 17profit vs. nonprofit corporations,

16public vs. private corporations,

16–17Geographic issues, 171–172Glass ceilings, 130

Global economy, impact of, 72Goals 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, 3Gross profits, 30

HHarassment and discrimination,

129–130, 132Health insurance, 185Histories, corporate, 20Hours of work, 98–100, 119

IImage and reputation, employer, 18–20Immediate supervisor

as interviewer, 141–142influences of, 125

Income taxes, state and municipal, 165Industry and position (employer)

definition of, ix–xi, 66–67description of, 65–66industries

comparisons of, 44definition of, 66–67impact on employment process,

67–69key questions about, 74trends and market shares

consolidations, impact of, 71–72definition of, 30, 72–73description of, 30, 69financial promotions, impact of,

71global economy, impact of, 72indicators of, 69–70strategic acquisitions, impact of,

71technological changes, impact of,

25–27, 70–71Industry comparisons, 44Information sources

analysts, 33–34annual reports, 40

196 INDEX

BBB (Better Business Bureau), 33Chambers of Commerce, 163D&B (Dun & Bradstreet) reports,

56D&B Million Dollar Directory, 34D&B Reference Book of Corporate

Management, 34description of, 31–32, 38–39, 163Directory of Corporate Affiliations

(Master Index), 35financial statements, 38–40friends, 163Internet, 32–33, 39libraries, business reference sections,

44Moody’s, 35nonprofit corporations, 38–39privately held corporations, 38–39public corporations, 38publications

reference, 34–35, 164trade, 33, 164

sales brochures, 40SEC (Securities and Exchange

Commission), 32Standard & Poors Registry of

Corporations, 34statistical data, 167–168subsidiaries and divisions vs. parent

corporations, 39–40Thomas Register, 34Thompson/Polk North American

Financial InstitutionsDirectory, 35

unavailable financials and, 39–40Wall Street Journal Index, 35Wards Business Directory, 34

Initial public offerings. See IPOs(initial public offerings)

Instability vs. stability, job, 1–2Insurance

costs of, 167–168health, 185life, 185

Intangible assets, 45–46Internal competition, 127–128Internet

information sources, 32–33, 39ventures, 86

Interpersonal relationships, employee,126

Interviewersattitudes of, 145casual contacts (“little people”) as,

140description of, 140executive and directors as, 142–143knowledge, 143prospective immediate supervisor as,

141–142prospective superiors as, 142psychologists as, 143salespersons as, 141screening of, 141

Interviewsevaluation of

description of, 144–146good vs. poor treatment and,

144–145ideal employment process and,

145importance of, 146interviewer attitude and knowl-

edge of, 143, 145. See alsoInterviewers

negative observations and, 144poor interview questions and

techniques and, 144prompt responses and, 145schedule delays and, 145

process of, 137employment process and. See

Employment processpoints of contact, 143–144

IPOs (initial public offerings), 57–58

JJob characteristics and nature

description of, ix–xi, 89–91duties and objectives

comparisons of, 93description of, 93–97evaluation of, 96–97identifications and clarification of,

94–96specific duties and tasks, 96–97

hours of work, 98–100job duration, 101

INDEX 197

Job characteristics and nature cont.job history and. See Job historyjob titles

assumptions about, 91–92classifications vs. titles, 92description of, 91–92ranks vs. titles, 92status vs. titles, 91–92wages and salary and, 92

key questions about, 105location, 97–98management responsibilities,

102–104premature conclusions and, 104social demands and entertainment,

101–102subordinates, 102–104travel, 100–101working conditions, 97–98

Job historybypassed employees and, 120–121change of duties, 108–109controversial vs. noncontroversial

job openings, 108description of, ix–xi, 107–108discharge openings

cause discharges, 116description of, 114–118discharge types, 115–116problems associated with,

117–118unsatisfactory performance

discharges, 116–117key questions about, 122new job openings

description of, 109–112special new jobs, 111–112training openings, 110–111

promotion and transfer openings,112–114

voluntary termination openings(resignations)

compensation issues and, 119description of, 118–120hours of work and, 119management problems and,

119–120promotional opportunities and,

119

turnover rates and, 121working conditions and, 120–121

Junior vs. senior positions,compensation, 182

KKey questions

about compensation, 190about cultural factors, 134about employer financial condition,

38, 52about employment environments, 13about employment processes and

procedures, 147about general employer information,

15–16, 36about industry and position, 74about job characteristics and nature,

105about management, 88about personal objectives, 149, 159

LLarge vs. small corporations, 85LBOs (leveraged buyouts), 58–59Leaves

maternity, 188sick, 185vacations, 184–185

Legal issues and legislation, 30–31,123–124

Leveraged buyouts. See LBOs (lever-aged buyouts)

Liabilities, current, 45Libraries, business reference sections, 44Life insurance, 185Limited experience, management

consultants, presence of, 85–87description of, 84–85education and, 85fads and, 85–86Internet ventures and, 86large vs. small corporations, 85organizational studies and, 86problems associated with, 84–85reengineering and, 86review systems, lack of, 85strategic planning and, 86

Liquidity, 54

198 INDEX

“Little people” (casual interviewcontacts), 140

Long-term vs. short-term debt, 46–47Long term vs. short term goals and

objectives, 10–12, 149, 151–153Loss businesses, 42Loyalty, decline of

description of, 4–6employee disenchantment and, 5employee mobility and, 5mergers and, 6positive aspects of, 5–6training programs and, 5turnover rates, 4

MManagement (employer)

benefits of understanding, 87CEOs (chief executive officers),

75–77, 83–86description of, ix–xi, 75excesses of, 127fast tracks and, 84key questions about, 88limited experience of

consultants, presence of, 85–87description of, 84–85education and, 85fads and, 85–86Internet ventures and, 86large vs. small corporations, 85organizational studies and, 86problems associated with, 84–85reengineering and, 86review systems, lack of, 85strategic planning and, 86

nepotism and, 83–84organization (structure) of

assumptions about, 81changes and, 79–80description of, 77–79organizational fads and, 80turnover and, 80–81

style and philosophies of, 124training programs and, 84your immediate supervisor

behavior of, 82–83current position, length of time in,

81

description of, 81facts vs. opinions and impressions

about, 81management styles of, 81perquisites, 82–83status of, 82–83symbiotic relationships and, 82

Market shares and trendscapitalization vs. shareholders’

equity, 47consolidations, impact of, 71–72definition of, 30, 72–73description of, 30, 69financial promotions, impact of, 71global economy, impact of, 72indicators of, 69–70market economic system, 2–3strategic acquisitions, impact of, 71technological changes, impact of,

25–27, 70–71Marketing and sales, 20Maternity leaves and benefits, 188Memorandums, private placement,

48–50Mergers, 6Mission statements, 21–22Mobility, employee, 5Moody’s, 35Municipal income taxes, 165

NNature of change, 1–2Negative interview observations, 144Negotiated compensation vs. first

offers, 9, 175–176Nepotism, 83–84New job openings

description of, 109–112special new jobs, 111–112training openings, 110–111

Nonfinancial vs. financial employerinformation, 15

Nonprofit vs. profit corporations, 16Numerical summaries, 41–42

OObjectives, personal. See Personal

objectivesOrganizational charts, 22–23

INDEX 199

Organizational size, 124–125Organizational studies, 86Overtime pay, 184Ownership (employer)

changes ofdescription of, 55disputed control and, 60indications of, 59–61owners’ ages and, 59portfolio corporations and, 59–60substandard financial perform-

ance and, 60up for sale vs. in play, 60–61

current ownership and control, 55–56D&B (Dun & Bradstreet) reports

and, 56description of, ix–xi, 53vs. employees, 62exit strategies

description of, 56–57IPOs (initial public offerings),

57–58LBOs (leveraged buyouts), 58–59

founders vs. current owners, 55–56Internet resources about, 56objectives of, 57perquisites of, 61–62proxy statements and, 56sale objectives

description of, 53–54for-profit vs. nonprofit

corporations, 54liquidity, 54venture capital and, 54

valuation of business investments,53–54

PPace of work, 126Parent corporations vs. subsidiaries

and divisions, 39–40Parking and transportation issues

benefits and availability, 187employer facilities, 28–29

Paternalism, 132–133Payment. See CompensationPensions, 185Performance, employee

performance ability, 135

performance-based compensationprograms, 177

performance-based discharges,116–117

Personal objectivescareer planning

description of, 151–152goals and objectives, 151–152job opportunities and objectives,

152description of, ix–xi, 149employment records, 155–156focus on the present, 153–156job duration issues

career goals and objectives, 158dead end jobs, 157–158description of, 156job satisfaction, 156–157

job security, 155–156key questions about, 149, 159leaving the current job, 154–155short term vs. long terms goals and

objectives, 149, 151–153uncertainty vs. certainty and, 150

Personality characteristics, 135Physical facilities

building maintenance, 27–28description of, 27–29furniture and work spaces, 29parking and transportation, 28–29stand-alone facilities vs. tenant

facilities, 28vacant space and, 28work environment, 29

Points of contact, interview process,143–144

Policies and practices, employer, 21–22Politics, 130–131Poor interview questions and tech-

niques, 144Poor vs. good interview treatment,

144–145Private placement memorandums,

48–50Private vs. public corporations, 16–17Procedures, employment

description of, 137employer’s timing, 137–138employment decisions and, 139–140

200 INDEX

employment obstacles and, 139employment process and, 135–147.

See also Employment processspecifics of, 138–139status of, 138

Process of employment. See Employ-ment process

Products and services, 24–25Profit sharing plans, 186Profit vs. nonprofit corporations, 16Profit-and-loss statements

comparisons, benchmark, 43comparisons, industry, 44creative accounting, 43description of, 40–41loss businesses, 42numerical summaries, 41–42profitability levels, 43–44restructuring losses, 42–43ROIs (return on investments), 43–44

Profitability levels, 43–44Promotion and transfer job openings,

112–114Property (ad valorem) taxes, 165–166Prospective boss and superiors,

141–142Proxy statements, 56Psychologists as interviewers, 143Public vs. private corporations, 16–17,

181Publications. See Information sources

QQuality of life issues, 167–172

RRacism, 129–130Ranking plans, wage and salary,

178–179Ranks vs. job titles, 92Ratios, current, 45Reciprocal relationships employer-

employee, ix–xRecreational issues, 132–133Recreational opportunities, 171–172Reengineering, 86Reference information. See Informa-

tion sourcesRegulatory issues, 3, 30–31

Religion and religious activities, 129Relocation and community-related

factorscomparisons to current community,

161–162description of, ix–xi, 161–162economic factors

automobile expenses, 168cost of living, 167–168description of, 164food costs, 167housing costs, 166–168insurance costs, 167–168taxes, 164–166. See also Taxestransportation availability, time,

and costs, 167utility costs, 168

information sourcesChambers of Commerce, 163description of, 163friends, 163publications, reference and trade,

164statistical data, 167–168

key questions about, 174local status of employer, 173medical care, 168–169quality of life issues

climate, 169–172community environment, 172cultural and intellectual activities,

171description of, 169geographic issues, 171–172recreational opportunities,

171–172religion and religious activities,

170–171similar interests, 172

school districts, 167, 169–170Relocation expenses, 187Resignations. See Voluntary termina-

tion job openings (resignations)Resources, informational. See Informa-

tion sourcesRestructuring losses, 42–43Resume preparation, 7Return on investments. See ROIs

(return on investments)

INDEX 201

Review systems, lack of, 85ROIs (return on investments), 43–44

SSalary and wages

compensation and benefit issues,175–190. See alsoCompensation

employee salary histories, 182–183formal administration programs,

177salary structures

administration policies and, 179approval procedures and, 180basic questions about, 179–180CLs (classification levels), 178–179compensation issues and. See

Compensationdescription of, 178–180reviews and, 180wage and salary job ranking

plans, 178–179wage increase frequencies and,

180Sales, corporate

brochures as information sources, 40taxes, 166total revenues, 30

Salespersons as interviewers, 141Schedule delays, interview, 145Screening interviewers, 141Senior vs. junior positions, compensa-

tion and, 182Services and products, 24–25Sexual-related issues, 130Shareholders’ equity vs. market

capitalization, 44–47Short term vs. long term goals and

objectives, 10–12, 149, 151–152Sick leaves, 185Signing bonuses, 187Size, organizational, 124–125Small vs. large corporations, 85Social demands and entertainment,

101–102Sources of information. See Informa-

tion sourcesSpecial new job openings, 111–112Specialty taxes, 166

Stability vs. instability, job, 1–2Stand-alone facilities vs. tenant facili-

ties, employer, 28Standard & Poors Registry of

Corporations, 34State income taxes, 165Status vs. job titles, 91–92Stocks

options, 187–188purchase plans, 186

Strategic acquisitions, 71Strategic plans, 21–22, 86Subordinates, 102–104Subsidiaries and divisions vs. parent

corporations, 39–40Supervisors

immediate supervisor influences, 125interviews with, 141–142superiors of, 142

Symbiotic relationships withsupervisors, 82

TTaxes

description of, 164–165income (municipal and state), 165property (ad valorem), 165–166sales, 166specialty, 166

Technological changes, impact of,25–27, 70–71

Termination pay, 188Thomas Register, 34Thompson/Polk North American

Financial Institutions Directory,35

Titles (job)assumptions about, 91–92classifications vs. titles, 92description of, 91–92ranks vs. titles, 92status vs. titles, 91–92wages and salary and, 92

Total sales revenues, 30Traditions, corporate, 126Training issues

benefits and programs, 5, 188–189job openings, training-related,

110–111

202 INDEX

training-related job openings,110–111

Transfer job openings, 112–114Transportation and parking, employer

facilities, 28–29Travel requirements, 100–101Trends and market shares

consolidations, impact of, 71–72definition of, 30, 72–73description of, 30, 69financial promotions, impact of, 71global economy, impact of, 72indicators of, 69–70strategic acquisitions, impact of, 71technological changes, impact of,

25–27, 70–71Turnover rates, 4, 80–81, 121

UUnavailable financials, 39–40University or college preferences,

employer, 133Unsatisfactory performance discharges,

116–117

VVacant space, employer facilities, 28Vacations, 184–185

Venture capital, 54Voluntary termination job openings

(resignations)compensation issues and, 119description of, 118–120hours of work and, 119management problems and,

119–120promotional opportunities and,

119turnover rates and, 121working conditions and,

120–121Volunteerism and charity,

131–132

WWages, salary, and benefits. See

CompensationWall Street Journal Index, 35Wards Business Directory, 34Web sources, 39Work environments

employee issues and, 37furniture and work spaces, 29normal, 125–126work pace, 126working conditions, 120–121

INDEX 203

Documents

Selecting Your Employer