Managers Part II - The Purpose of a Business

Before we look at the qualities of a manager, let's look at the environment in which a manager functions - a business. The first thing to remember about a business is that it exists primarily to make money for the owners or shareholders of the business. Whatever charitable impulses that an owner may harbor, no matter how much he donates, none of that would be possible without turning a profit.

A few years ago I attended a shareholders meeting for the company that employed me. The company had what is referred to as an Employee Stock Ownership Plan (ESOP). The way it worked was that a certain percentage of the profits were set aside as profit sharing to most employees, allocated according to their salaries. The company president, the son of the company founder was talking about this program as if it was an example of his father's care and concern for his employees. The founder himself, at that time pushing 90, was in attendance. He was asked what his reasoning was for setting up the ESOP. He responded that he thought it was a good way to legally lower his tax liability and still have use of the cash. A pretty honest answer, one that his son apparently wasn't honest enough to give. The point is, that maybe your company's owners do care about you on some level, but the bottom line is money. Many people who have seen their jobs migrate out of the country have found this out.

Many of the people that I've worked with over the years had the odd notion that their job existed solely for their convenience or that their paycheck should correspond to their household budgetary needs. People who claimed that they were available to work certain shifts and were hired because they could work those shifts, suddenly couldn't work those shifts.

In a perfect world, businesses would figure out what needed to be accomplished and when it needed to be done, calculate how many people it took to do it and hire the exact number of people they had determined they needed. They would set a pay rate that was sufficient to draw in enough people who had the skills needed. People would apply for those jobs because the pay and the schedule were what they needed and the requirements were within their abilities.

Awww...that's cute.

What happens in reality is that a business first determines what percentage of sales they will spend on payroll. Now this obviously means that as sales fluctuate, what a business will spend on payroll will also fluctuate. This, despite the fact that many things still need to be done even if no customers walk through the door. Managers are expected to manage their employees' schedules to conform to these percentages. Managers who can't do this usually find out fairly quickly that they are no longer managers.

So, what we're talking about here is that the manager, who is first and foremost a representative of the business and not your buddy, is being paid to make sure that the company is making as much money as possible. How that manager maximizes profits will determine whether the employees think he or she is a "good" manager or a "bad" manager, but make no mistake about it, Priority #1 is always to turn a profit. Anything that gets in the way of that, even you, will eventually be eliminated.

This is the environment in which your boss operates, every day.