Management Glossary

  Terms beginning with e
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escalation clause
A clause in a lease specifying how much rent will increase in each year of the lease.
Contributed by: ManagerWise Staff


Funds held in escrow are held by a trusted third-party that does not otherwise participate in a contract. Once the conditions for payment as set out in the contractare met, the third party will transfer the funds to the person or company to whom they are due.

Contributed by: ManagerWise Staff

Employee Stock Ownership Plan
Contributed by: ManagerWise Staff
See: employee stock ownership plan

ex officio

A right that is granted simply as a result of holding a particular office. For example, corporate bylaws might give the president of a company the automatic right to be included on certain board committees. The company's president would then be said to be an ex officio member of those committees.

Contributed by: Managerwise Staff

exit interview
An interview conducted with a (soon to be former) employee just before he or she leaves the company. The goal is to determine the reasons for the employee's departure. The primary end-objective should be to uncover any correctable problems within the company that might have caused the employee to leave--and might result in other valuable employees leaving if the not corrected. Because the problem might have been with the employee's manager/supervisor and the employee might be reluctant to share information about the problem with the person who was the source of the problem--and, even if the information is shared, it might not be passed on by the manager/supervisor--the interview should be conducted by someone, such as a human resources department professional, who did not have direct influence on the employee's work activities.
Contributed by: Managerwise Staff

expected value
A measure used to evaluate the advisability of undertaking an action with uncertain outcomes. Expected value is calculated by multiplying the value of each possible outcome by the probability of it happening and summing the result for all possible outcomes.

For example, if you are considering undertaking a project and believe that there are only three possible outcomes for the project:
  • There is a 60% chance that the project will show a $1,000 profit.
  • There is a 30% chance that the project will just break-even (no profit, no loss).
  • There is a 10% chance that the profit will show a $500 loss.
Then the expected value of the project is:
(0.6 x $1,000) + (0.3 x $0) + (0.1 x -$500)
  = $600 + $0 - $50
  = $550.
Contributed by: ManagerWise Staff

Any amount spent in the course of business with the exception of those used to buy assets such as land, capital equipment or bonds. Expenses are considered to be incurred for the purchase of capital equipment only as the equipment is depreciated according to the accepted accounting principles.
Contributed by: ManagerWise Staff
See: capital equipment, depreciation

expense account
An account to which employees can charge business expenses that they incur personally (such as entertainment of customers). An expense account usually implies a limit that the employee can charge per month/year.
extrinsic reward

A tangible reward, such as salary, bonuses and perks, that is explicitly given to an employee for doing a job.

Contributed by: Managerwise Staff
See: intrinsic reward

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