Human resource management in small business - do your employees know where they stand?

Human capital is often considered the most important asset in small businesses. Small business employees have a direct impact on the working environment that is created, the way the business runs and ultimately whether it produces successful outcomes or not. Because of this it is important that small business owners ensure their employees understand what is expected of them and what is envisioned for the future of the company. These expectations and objectives should be clearly and concisely set-out in your company's human resource policies.

Typically human resource policies comprise: a goal statement which outlines company HR policy; a statement about equal opportunity; and an employee manual that sets out the hours of employment, conditions of employment and management's expectations of staff. It can also cover issues regarding dress code and leave and disciplinary procedures. However, a HR policy is more than just a manual comprising rules and regulations; a HR policy reflects the psyche of the company and illustrates workplace values.

Things to keep in mind when assessing your HR policy include:

1. Does it explain what is expected of your staff?

Your policy should include clear guidelines as to:

  • how productive staff are expected to be;
  • how they should treat each other; and
  • if they should assist in each other's work or focus on their own efforts.

The behaviours you expect will contribute to whether your work environment fosters a team-problem solving culture or an individualistic culture. The desired outcome will differ depending on what industry you are in. For example, a call centre environment may require individuals to fulfil their own call quotas, while a consulting firm may require individuals to collaborate in teams to get the job done.

2. Does it provide motivation?

Simply stating that staff are expected to be productive and cooperative may not be sufficient to motivate your employees to work. A good HR policy will outline how employees will be measured and what kind of rewards or promotions they will be given for high performance. For example, a HR policy for a call centre might state that employee time-sheets will be assessed relative to the number of calls made on a monthly basis to ensure they are meeting the required levels of productivity, and subsequently rewarded for those efforts. This differs to a consultancy company, where a team's project may be evaluated with regard to factors such as completion-to-budget and deadline, with success of these factors contributing to their annual bonus or subsequent promotion. When staff know how they can earn rewards, they are more likely to strive for results in particular areas, rather than simply clocking-in and clocking-out. Click here for more information on managing performance >>

3. Does it communicate the business vision?

A HR policy is one of the most effective platforms for projecting your business vision and explaining to your employees how they fit into that vision. As Treacy Sheehan from Australian recruitment firm Trace Personnel said, a HR policy should reflect how your business is expected to grow in the next 5 to 10 years. This will ensure that employees understand the bigger goals of the business and help them to contextualise any changes that occur in the work place as the business evolves i.e. increasing staff numbers or changes in divisional structure. Click here for more information on preparing your business for change >>.

Additionally, provide opportunities for your employees to contribute to the business's vision; it is crucial that your employees do not feel that they are irrelevant to greater goals of the company. Staff should feel connected to the company vision as, especially in a small business, they are ultimately responsible for its achievement.

A well thought out human resource policy that is communicated clearly to your staff can save your business time and money. When employees understand what is expected of them there is less need for them to seek constant guidance and management can focus their efforts on other areas of the business. Additionally, it benefits your business to assess its human resource management and ensure that its practices adhere to legal requirements.

It is important to note however, that while creating good HR policy is half the work, ensuring that it is understood and followed is what guarantees its ultimate success. Make time to discuss HR objectives with your employees and be flexible in addressing what their needs may be. If your staff know what you want from them and where you want your business to go and how you will reach that objective, your business has the best chance of success possible. 

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