VB Management Lessons 1-5

You represent a union. You expect inflation to be 2% per year for the next five years, and you want your members' wages to keep up with inflation. Today, your members earn $18/hour. What will they need to earn per hour in four years to keep up with inflation? (Round to the nearest penny.)

$18 x (1.02)4 = $19.48

Your employees have an average salary of $37,000 per year. Their benefits, health insurance and a retirement plan, are worth $22,000 per year. What percentage of their total compensation (salary plus benefits) is benefits? (Round to the nearest percent.)

$22,000 / ($37,000 + $22,000) = .37 = 37%

Last month, you made a profit of $22,145. Your revenue for that month was $255,364. What was your profit as a percentage of revenue. (Round to the nearest percent.)

$22,145 / $255,364 = 0.0867 = 9%

You are offering a job at a salary of $50,000 per year. Employer taxes (social security, unemployement, etc.) will add 9% to the cost of the employee and benefits will add 20%. What is your total expected annual cost to hire the employee?

$50,000 + .09 x $50,000 + .20 x $50,000 = $64,500

Recruiter.com is offering a "buy one, get three free" sale on recruiting ads. The ads normally cost $80 each. What will your cost per ad be with the sale?

$80 / 4 total ads = $20 per ad

You negotiate a new contract that raises wages from $20/hour to $25/hour. What is the percentage increase in wages? (Round to the nearest percent.)

($25 - $20) / $20 = .25 = 25%

In 2015, your company had revenue of $80,000. In 2014, revenue was $60,000. What is the growth rate of your company?

($80,000 - $60,000) / $60,000 = 0.333 = 33%

A company has the following structure. One manager for every eight first-level employees. One vice president for every ten managers and one president to oversee the vice presidents. The company has 400 first-level employees. What percentage of the company's employees are managers or above?

400 first level employees400 / 8 = 50 managers50 / 10 = 5 vice presidents1 presidentAll management employees = 50 + 5 + 1 = 56All employees = 400 + 56 = 45656 / 456 = .122 = 12%

You've read an article that suggests that for every employee who expresses a complaint, there are 4 MORE with the same issue who remain silent. If you have 200 employees and receive 5 complaints, what percentage of your employees have the complaint?

5 employees complained5 x 4 = 20 employees had the same complaint but were silent20 + 5 = 25 employees / 200 total employees = 12.5% have the grievance

Of your employees, 70% are happy with work conditions and 30% are happy with pay, and 10% are happy with both. What percent are happy with work conditions but not pay?

70% - 10% = 60%

profit

A business's revenue minus expenses (also known as the bottom line).

job description

A document detailing what a person who takes a certain job will be required to do

net profit (or net income)

A figure that indicates whether and how profitable the company has been during the reporting period (fiscal year).

offer letter

A formal letter offering an individual a job

employee survey

A formal list of questions sent to all employees designed to accurately gauge employee opinions on one or more topics

personality test

A formal or informal assessment of a candidate's personality, used to determine his or her suitability for the role

sourcing plan

A formal or informal plan by a company that identifies the ways in which a company will seek out qualified job candidates

performance review

A formal process in which a manager provides feedback on an employee's performance, suggesting ways to improve and recognizing recent achievements

picket line

A line created by striking employees outside their place of employment.

"open door" policy

A management style that encourages employees to provide continuous input to the management team

micromanagement

A negative form of management in which the manager is directly involved in making the multitude of small decisions that lead to a desired outcome

scab

A pejorative term used to refer to union and nonunion employees who cross the picket line and report to work.

arbitration

A process by which workers and management work with a third-party mediator to resolve contract disputes.

suggestion box

A secure box often put in an employee lunchroom or other prominent place. Employees can write their thoughts on cards and place them in the box for collection and review by managers.

résumé

A short document produced by job seekers to outline their skills, experience, and interests

balance sheet

A statement that highlights what a business owes (liabilities), what a business owns (assets), and how much shareholder equity (profits) exists at the time the balance sheet was generated.

income statement

A summary of the money a company brought in (revenue), what it paid out (expenses), and the difference (profit).

phone screen

A telephone interview with a job candidate designed to assess whether he or she is a desirable enough candidate to go forward with an in-person interview

in-person interview

A type of job interview in which the candidate meets with company officials, usually at the employer's headquarters

strike

An action in which unionized workers leave their jobs and refuse to return to work until certain demands are met by management.

whistleblower

An employee who points out illegal activities occurring at the company

union organizer

An individual who helps employees organize a union at their place of work.

needs assessment

An internal company process to determine its staffing needs

liability

An obligation of the company to pay someone else for products or services rendered in the past.

union

An organized group of workers who bargain collectively with management in an attempt to get their demands met.

milestones

As part of a professional development plan, the key outcomes expected for each employee within a certain time frame (e.g., mastering the company's content management system)

You offer employees 2 weeks paid vacation out of 52 weeks per year. Based on employee feedback, you'd like to offer 3 weeks. If you now have 100 employees, and productivity does not change, how many employees would you need to add to maintain your same level of production and give the extra vacation? (Round to the nearest worker.)

Current work time per year = 100 workers x (52-2) weeks = 5,000 worker-weeksTo maintain production, we need 5,000 worker-weeks = W workers x (52-3) weeks with the new vacation scheduleW = 5,000 / (52-3) = 102 workers. You need 2 additional workers

You are the manager of sixteen employees, each making $800 per week. Unfortunately, your boss has told you that you must reduce your payroll by $124,800 for next year. How many jobs do you need to cut? (Assume employees are paid 52 weeks per year.)

Each employee makes: 52 weeks per year x $800 per week = $41,600 per yr$124,800 per year cut / $41,600 per employee per year = 3 employees

You believe there is a 30% chance that you will experience a strike. If that strike occurs, you will lose $200,000. What is the "expected value" of your loss?

Expected value = likelihood of outcome x monetary value of the outcomeExpected value (loss) = 0.30 x $200,000 = $60,000

You can recruit an experienced painter for $25/hour who can paint 6 bicycles per hour. You can also recruit a less experienced painter for $18/hour who can paint 4 bicycles per hour. At least in the short term, which painter is more cost effective?

Experienced painter cost per bike = $25 per hour / 6 bikes per hour = $4.17 per bikeLess experienced painter cost per bike = $18 per hour / 4 bikes per hour = $4.50 per bikeExperienced painter is more cost effective

employee meetings

Face-to-face meetings between managers and employees in which managers solicit feedback and ideas.

strategic planning sessions

High-level discussions about the current state of the business and how it's performing as well as next steps, such as new strategic investments and targeting new market verticals

trust agent

In the context of soliciting ideas and feedback, a trustworthy individual (often a manager) who is seen as having integrity

union dues

Money paid by union members to support the union's operations.

town hall meetings

Open forums in which employees and managers discuss topics relevant to the company, including new product ideas and other employee feedback. Typically managers field questions from employees, and any ideas or feedback are acted upon subsequent to the meeting.

gross profit

Profit before taxes are paid.

assets

Resources that either have value or can be used to produce something of value.

tangible asset

Something you can touch, like your company's building or the products in inventory.

intangible asset

Something you can't touch but still provides business value to your company.

revenue

The amount of money (or income) that a company gets from its customers (also known as a company's top line).

profit margin

The company's net income divided by net sales.

person specification

The distillation by a company of the type of person and the skills required for performing a role successfully

collective agreement

The end result of collective bargaining, delineating worker benefits and management's responsibilities.

professional development

The formal and informal methods used to help employees master their job functions and develop new skills that will lead to new professional opportunities with the company

purple squirrel

The ideal candidate for an open position

ideation

The life cycle of an idea, from the original idea through, in some cases, its actual implementation.

employee engagement

The means by which employees are made to feel that they are an integral part of the day-to-day workings of the organization in which their voices are heard.

expenses

The money going out of the business. An expense could include money spent on raw materials, machinery (like laptops), and especially employee salaries and benefits (such as health insurance).

goals

The personal and professional objectives of an employee

active listening

The process by which two people (manager and employee) intently listen to each other and repeat back what they heard, clarifying any miscommunication

collective bargaining

The process by which unions and management negotiate the provisions of a new contract, including benefits and pay.

employee supervision

The process in which a manager helps employees to be successful and fulfilled at work, leading to professional and personal development

recruiting

The process of finding and hiring the best candidates for any given open position

onboarding

The process of orienting and training a new employee

You have two employees who report directly to you. One is making $46,000/year and the second is making $34,000/year. You feel the second employee has done outstanding work, and you want to give her a $4,000/year raise. The company has limited you to a total increase in payroll of 6% for next year. How much of a raise can you afford to give to the first employee if you give the second employee a $4,000/year raise?

Total allowable increase = 0.06 x ($34,000 + $46,000) = $4,800$4,800 - $4,000 = $800

cost of sales

What the company needed to spend (payments to suppliers, etc.) in order to generate its net sales.

owner's equity (or owner's capital)

What's left to the business owner once the company has paid all its debts.