Free Form Friday: Executive Compensation

Today’s

Vocabulary

(1) Compensation: Usually money, but anything someone is given to do a job.

If we want to attract the best employees, we need to increase compensation.

(2) Big bucks: Bucks means dollars, so we often talk about “big bucks” to mean a lot of money.

I don’t get paid big bucks, but I love my job.

(3) Objectively: The opposite of subjectively–it means to think about something without emotions or personal opinions

I can’t think about this deal objectively because I’m so angry with her.

Today’s

Questions

1. Why should executive compensation be put at risk?

a. It’s only fair for executives to be able to lose their money.

b. So that executives can lose something and are therefore motivated to work well.

c. If executives can lose their money, they’ll think about the long-term more.

2. What’s one way compensation could encourage long-term thinking?

a. It could be lost if the executive does a bad job

b. It could be linked with low pay at the company

c. It could increase for each good year

3. What’s one way to make executive pay fair?

a. It could be linked with low pay at the company

b. Executives could get paid well only if the company does well

c. It could be linked with long-term thinking

7 ________________________

Free Form Friday

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JHML1103-6609 By Jeremy Schaar

Today on the blog, we’ll look at an article on CEO pay. You’ll learn some interesting ideas about how to determine CEO pay. You’ll also learn some useful vocabulary.

In this post at Strategy+Business, James O’Toole discusses CEO pay. He begins by noting that SEC (Securities and Exchange Commission) regulators are going to force companies to become more transparent about CEO pay. But he would prefer if company boards would just do a better job with executive compensation. To that end he suggests three principles.

1. “Put executive money at risk”

To be “at risk” means that something can be lost. He gives a nice example of going to a casino. If you’re playing with your money, then you’re cautious. But if the casino gives you money, then you don’t care. You can only win, you can’t lose. With stock options, he feels executives have nothing to lose, they can only win. He encourages companies to give actual stock instead of stock options.

2. “Compensation needs to encourage long-term thinking.”

To encourage something is to push someone to something. He thinks that bonuses are good motivators, but that they should increase with each year of performance in order to encourage long-term thinking (e.g. 10% for one good year, 20% for two good years, etc.)

3. “The third principle is fairness. I suspect there would be less public outcry about executive compensation if those big bucks were seen as objectively earned.”

“Public outcry” is when a lot of people complain about something. He doesn’t know what fair pay is, but it does seem unfair for a CEO to make $25 million when a secretary makes $25,000. But that’s not his real point. He thinks the big problem is when executives get a lot of money after the company does really bad. Fair means that if the company does well, so does the executive. If the company does bad, the executives don’t get millions of dollars.

What do you think? As always, if you have any questions, please post them on the blog, Facebook, or Twitter.

And, by the way, if you have trouble understanding the blogs or LinkedIn groups, send me a message. We teach lots of students Business English and I’m sure we could help you too!

CHECK YOUR ANSWERS!

Answers To Today’s Questions

B, C, B

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You Can Do It All Yourself But You Dont Have To

Writing Great Emails: Polite vs. Direct

Today’s

Vocabulary

(1) Assertive: Strongly presenting your opinion

Be very assertive when you ask for a raise. Tell her exactly why she should give it to you. Don’t be afraid.

(2) Rude: Impolite

I can’t believe how rude he is! He asked how old I was and if I was on a diet!

(3) Grateful: Thankful

I was really grateful you were there. I would have done terrible without you.

Today’s

Questions

1. What is a big advantage of being direct?

a. You know no one will be angry

b. You know you will be understood

c. You know they’ll like you

2. What is a big advantage of being polite?

a. You know no one will be angry

b. You know you will be understood

c. You know they’ll like you

3. What is one way to be polite?

a. Tell a joke

b. Say that something is possible

c. Ask if something is possible

7________________________

Writing Great Emails

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En-velop_bleu By Jeremy Schaar

Do you want to be more polite or more direct when you’re writing emails? There are advantages and disadvantages to both. Of course, it’s not quite so simple. In a perfect world, your writing will be both polite and direct.

In today’s lesson, you’ll learn about the differences. Then you’ll study some examples.

Direct

Advantages: Direct writing is confident and assertive. You’re acting like you know what you’re writing about very well. It’s also very clear.

Disadvantages: Direct writing can be rude and uncaring if you’re not careful.

Polite

Advantages: You’ll be friendly, likeable, and caring.

Disadvantages: By focusing on being polite, it might not seem like something is very important to you.

Let’s look at a situation. The first sentence will be direct. The second will be polite. The third will be a combination.

Situation: You need to request 500 extra units of something at the last minute. You’re writing to your supplier.

Direct: Please send 500 extra units. We will need them by Friday.

Polite: Do you think it would be possible to send us 500 extra units by Friday? We’d be most grateful.

Notice that the direct version is very short and clear. No one would misunderstand you. However, you’re giving an order here. Do you want to order your supplier? What if they can’t do it? What if they’ll feel bad if you don’t ask nicely? Maybe you’ll offend them.

The polite version could be misunderstood. It doesn’t seem important. However, by saying “do you think it would be possible,” you’re being very kind. “We’d be most grateful” means that you’re thanking them in advance. They haven’t even done anything, and you’ve already thanked them!

Best: We really need 500 extra units by Friday. Can you help us out with this order?

This is best. You’re being direct, but polite. You still ask a question, but only after you’ve been direct. (Questions make English more polite.) Also, you don’t thank them in advance. Instead, you ask a short question and imply that you’ll thank them for the help.

Want more practice? Got questions? Comment on the blog, Facebook, or Twitter.

CHECK YOUR ANSWERS!

Answers To Today’s Questions

B, A, C

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You Can Do It All Yourself But You Dont Have To

Supply Chain Wednesday: Harmonized Key Performance Indicators

Today’s

Vocabulary

(1) Indicator: Something that gives you information on something else

The unemployment rate is a good indicator of demand for new cars

(2) Volume: Amount, level

As volume increases, we can take advantage of economies of scale

(3) To be in conflict with: When two things cause problems by existing together

The supplier’s order specifications are in conflict with our best practices. We need to adjust one or the other.

Today’s

Questions

1. Which is least likely to be a KPI?

a. Sales Volume

b. Sales Leads

c. Sales Hires

2. What is a harmonized key performance indicator?

a. An indicator that works for all (or most) areas of a company

b. An indicator that increases profits

c. An indicator that is the same for the customer and for the company

3. How might a boss request more information?

a. I want everyone to mix up…

b. I want everyone to draw up…

c. I want everyone to move up…

7 ________________________

SUPPLY CHAIN WEDNESDAY

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By Jeremy Schaar

Today on the blog you’ll learn about Harmonized Key Performance Indicators (KPI). You’ll learn about an example of how a company can create good indicators. Finally, you’ll learn some real life expressions that you can use on the job.

Concept

Key Performance Indicators (KPI) are metrics a company uses to check how well they are performing. Examples of metrics include volume and how well you stay on schedule. Many different metrics can help track and motivate a department. For example, if the metric is volume, the production team will certainly do their best to produce the correct volume. If the metric is defects, then teams will try to reduce the number of defects.

The difficult situation is when metrics are in conflict. Manufacturing might need to choose between volume and defects. That’s hard, but management can direct manufacturing to focus on one thing. The bigger problem is when the metric for one department is in conflict with the metric for another department. For example, sales might be trying to increase orders. At the same time, manufacturing might be trying to decrease defects. A company with this situation could easily have too many orders

Example

Here’s a great link to a paper by Booz and Company. Scroll down to page seven and you’ll see a great example of a harmonized key performance indicator. Harmonized key performance indicators work well for all (or most) areas of a company. In the paper, they write about the cash conversion cycle. They write that this is “a single metric to focus everyone on the speed of moving things along the supply chain—a common theme that would impact the functional metrics of inventory, service levels, lead times, and quality.”

This should be the goal of key performance indicators. They should be metrics that work across departments. Ideally, they’ll be of use for your partners and clients as well.

On The Job

“ I want everyone to draw up a list of performance indicators that other departments could use.”

This sentence is a way to request people to think about harmonized key performance indicators. It’s something a boss would say to get more information.

“The problem is that our suppliers, our customers, and we all define the metrics differently. There’s no harmony among us.

The problem is that” is an easy way to start a sentence about a complaint. It clearly announces it. In this case the problem is about the harmony of metrics.

Got questions or comments? How about practicing some new vocabulary and posting your thoughts on the blog, Facebook, or Twitter?

CHECK YOUR ANSWERS!

Answers To Today’s Questions

C, A, B

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You Can Do It All Yourself But You Dont Have To

Business Strategy Monday: Microsoft’s New Strategy

Today’s

Vocabulary

(1) Implication: Things that become true because of something else.

The implications for an improving economy are probably more jobs and higher profits.

(2) To make a case for something: To argue something is true.

We made our case for expanding into Japan, now we need to see if they’ll accept our proposal.

(3) Default device: The device people will use when they’re unsure or don’t get to make a choice

The default device for calling people is still the phone, but it might become the computer.

Today’s

Questions

1. What is Microsoft’s new strategy?

a. To make the best hardware in the world

b. To make the best software in the world

c. To make the software and hardware for their devices really good

2. What does it mean to leverage a relationship?

a. To use an existing relationship to do something else

b. To expand the relationship you have with someone

c. To begin a new partnership

3. How might Microsoft leverage its corporate relationships?

a. To sell tablets to corporations

b. To make tablets more entertaining

c. To sell tablets to the public

7 ________________________

BUSINESS STRATEGY MONDAY

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Cartoon by XKCD.com

By Jeremy Schaar

In the previous two lessons, you learned what Microsoft’s strategy was and how it has changed. Today, you’ll learn about the implications for Microsoft’s strategy.

To quickly review, Microsoft’s previous strategy was to only sell software. Everyone wanted the same software, so they could charge high prices and everyone would pay. They didn’t make hardware because all the hardware was basically the same. It was a commodity and not very profitable.

Things changed for two reasons. First, hardware isn’t a commodity anymore. For example, there are significant differences between an iPhone and a Galaxy Note. Second, Google now gives away Android for free.

Therefore, Microsoft is now trying to copy Apple and make the best software/hardware bundle. They hope people will buy their devices because their hardware and software are so good.

Will this work?

It will be hard. Apple and Samsung are already great. But here’s a case for how Microsoft succeeds.

First, note that most people use their tablets for entertainment–not for work. Apple and Samsung understand this, so their tablets are designed for games and web browsing more than productivity. They don’t really try to sell tablets to corporations. The Microsoft tablet is different. Microsoft emphasizes that you can multitask with it, you can use Microsoft Office, and it has a nice stand and keyboard.

Imagine that the Microsoft tablet therefore becomes the default device for businesses. In fact, Microsoft is still very profitable because of its corporate accounts. (Many people download illegal versions of Microsoft Windows, but corporations still pay.) Microsoft can leverage those existing relationships to sell their tablets. Then, when office workers are all using their tablets, they’ll be able to expand to the general public.

With the strategy decided, it becomes a question of B2B marketing. It will be fascinating to watch how well Microsoft succeeds.

Got questions or comments? How about practicing some new vocabulary and posting your thoughts on the blog, Facebook, or Twitter?

CHECK YOUR ANSWERS!

Answers To Today’s Questions

C, A, A

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You Can Do It All Yourself But You Dont Have To

Writing Great Emails: Useful Phrases #3

Today’s

Vocabulary

(1) Contact: Someone you know

I have a contact at that firm. Let me see if she can help.

(2) Independent clause: This is a grammar term. It basically means a sentence.

“Wondering about books” is a dependent clause. “I wonder about books” is an independent clause.

(3) To commit yourself: To agree to do something

I committed myself to working here for at least five years. After that, I might go back to school.

Today’s

Questions

1. Is “I’ll put you in touch with” casual or formal?

a. Casual

b. Formal

c. It can be used in both situations

2. Why does “It seems as if” let you change your mind

a. You’re talking about the evidence for something, not the thing itself

b. You’re making it seem like you’re not sure about the truth

c. You’re being very direct

3. Which sentence is a stronger belief?

a. He’ll get the contract.

b. It seems as if he’ll get the contract.

7________________________

Writing Great Emails

________________________

En-velop_bleu By Jeremy Schaar

This week on the blog I’ll introduce two more useful phrases. You’ll learn what they mean and read a few examples of how you might use them.

1. I’ll put you in touch with

We use I’ll put you in touch with to introduce a contact. It’s polite and can be used in formal or casual situations. The contact might be someone who can help you or who will work with you. Here are two examples:

I’ll put you in touch with Julie in HR. She’ll help you with your orientation around here.

I’ll put you in touch with Mike at the law firm. The two of you should work together to complete this project.

I’ll put you in touch with is used when you are connecting two people. It can also be used to describe anyone being connected. Here are some examples:

She got me in touch with HR. They’ve been very helpful.

I need to get in touch with someone who knows the details better.

We’ve been in touch for a long time, but this is the first time we’re working closely together.

2. It seems as if…

It seems as if is a nice way to soften your sentence and take away personal responsibility. It lets you easily change your mind. It means “I think this is true because of the evidence.” It’s followed by an independent clause. For example:

It seems as if he doesn’t care.

It seems as if we’ll get the contract.

By itself, He doesn’t care, is very direct. You’re very sure. By adding “It seems as if” to the beginning, you’re leaving some doubt. You don’t want to be rude. You’re saying that the evidence shows that he doesn’t care. But he might.

Same for the second example. Something makes you think that you’ll get the contract. But your comment is on the evidence, not the contract.

It is therefore a nice way to give an opinion without committing yourself. If the evidence changes, you can easily change your mind and not look stupid.

Want more practice? Got questions? Comment on the blog, Facebook, or Twitter.

CHECK YOUR ANSWERS!

Answers To Today’s Questions

C, A, A

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You Can Do It All Yourself But You Dont Have To

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