Blog Post: The Employer/Employee Relationship

The third chapter in my book is titled, “Am I Really in the NFL?” and is about business profits.

“In the National Football League (NFL), the amount of money set aside for employee salaries (players) is a set percentage of revenue earned by the owners.  The more money earned by the League, from ticket sales, television contracts, etc., the more money the players make.  The contract negotiated between the owners and players clearly shows the relationship between the business and its employees.  If the league negotiates more money from the television networks, player salaries rise.  If NFL games suddenly do poorly in the ratings, and the league gets less money in its television contracts, player salaries decline.  If the league suddenly could not get any television contracts, employees could lose their jobs (player rosters could be cut).

While most businesses do not have a negotiated rate of revenue which they use on employee wages, the concept is the same.  The more money a business makes, the more money it has to spend on employee salaries and benefits, and the less likely it is to have layoffs (employees lose their jobs).”

While this concept should be common sense, it often is not.

“Another old “wise” tale I heard from an old wise man at a meeting in my days generating a work readiness program and curriculum for a South Florida client follows.

The owner of a small manufacturing firm in Florida called his entire staff together for a meeting.  Everyone knew the meeting was about the status of a pending contract.  The manufacturing company had worked on previous contracts for the company for whom it was awaiting word on a new contract.  In the past, contracts with this company resulted in a lot of highly stressful work, which included long hours and tight timeframes for product delivery.  The owner then announced that the company did not get the contract.  There were cheers all around the room because workers were relieved that they would not have to go through the long days and stressful times again.  The next day many started being fired from their jobs.  Without that client, the manufacturing company did not have the funds to keep everyone employed.”

Always remember that your job is available because the company that employs you is conducting enough business, and making enough money for that job to be needed.  Therefore, your job and associated pay scale are tied directly to the success (profitability) of the business you work for.

That’s all for now, catch you in my next post.