Anyone who works within a large corporate structure has gone through the pain and anguish of an audit. One small part of preparation for audits involves making sure that your employees can answer a couple questions about specs or the company’s mission statement.

Asinine nature of this particular aspect of the audit aside, the worst part of this is that they always the wrong questions. “How many tomatoes go on a sandwich?” “To whom should you fax your TPS reports?” “What is our company’s mission statement?”

Who the hell thinks that these are the questions you should be asking young employees? If they can’t answer the first two, they should have been fired a long time ago. If they can’t answer the last one, but they’re still good at their jobs, who cares?

There are questions about your company that your young employees should be able to answer. If they can’t answer these questions, it means they don’t understand their impact. Even the best intentioned employees in the world can’t possibly make good decisions if they don’t understand the consequences of their actions. The answers to these questions should be an integral part of your training program.

1. How does this company make money?

Understanding every minute detail of a business model is unimportant to a front-line employee, but knowing that the company makes its money in a certain way, from certain people, because of certain processes is powerful knowledge. If, for instance, you make mega-dollars off of extended warranties while your margins are slim for the products themselves, make sure your employees understand this. Their understanding of the way the company functions will affect their view of their role within the company.

2. How do we get customers?

Your young employees should understand that TV spots aren’t the sole reason customers frequent your establishment. If you’ve never taught them the dollar value that can be created by positive interactions, a good environment, word-of-mouth, repeat customers, or any of the dozens of ways you earn customers, you’re doing yourself a disservice.

3. How much does it cost to run this business?

Don’t bother handing your new high school employee your P&L. With a young employee who is just trying to make enough to fill his gas tank, you’re simply throwing out astronomical pie-in-the-sky numbers that don’t mean a thing to him. Instead, appeal to baser instincts by way of simple arithmetic. If everyone needs to understand how much beef costs you, find ways to break that cost down. Calculate daily, weekly, and monthly numbers. Put those numbers in relation to an employee’s real life. For instance, two weeks of beef loss might equal one car payment. Or, if food loss eats 10% off your profit, explain to a young employee that the business has essentially taken a 10% pay cut. Calculate out the new hourly wage of the employee if his pay were reduced by 10% to show him a meaningful difference.

Another way I like to look at this one is to ask, “If I paid $100 for labor from noon to one p.m., and I took in $110 dollars, how much money did I make?” So long as you pay rent, utilities, costs for supplies, taxes, and any of a bevy of other expenses, the answer is guaranteed to be less than $10. In fact, you may well have lost money. I also like this question because it segues so nicely into:

4. If I pay you $50, and you make $50 for me, what should I do?

If your young employee says, “Give me a raise!” you need to teach him that the correct answer is, “Fire me.” Employees need to produce more than they are paid for the business to make money. I know you’re supposed to be running a business, not teaching economics. But dispensing a few basic lessons in subjects like profit, loss, supply, and demand may prove more valuable to you than you could ever imagine.

5. Who pays your paycheck?

This one is an oldie, but a goldie. You don’t pay your employees’ paychecks. Your customers and clients do. They provide the money. They provide the need for the service your employees’ provide. Be sure your employees know that.

HOMEWORK

Ask your young employees these questions. I’m interested in knowing if their answers make you weep, laugh, or beam with pride.