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chapter 19 bus 230

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  • Hiring an employee is a nerve racking prospect for a small business owner. 75% of small business have no employees. Adding employees increases the skill base of the company, and the amount of work which can be done. Shifts can vary to increase store hours, teamwork may increase efficiency, more customers can get individualized attention.
  • However, you are responsible for your employees. Luckily, for small business owners, many OHSA regulations don’t kick in until the company reaches a certain size. Thus legal requirements for 5 employees are much less than for 35 employees. However, laws such as minimum wage still apply.
  • Running advertisements for employees is expensive and results in many resumes to sift through. Additionally, those people may know nothing about your company. However, customers and current employees who enjoy their jobs may be some of your best referrals. Posting job openings on your website appeals to people already interested in , and possibly knowledgeable about, your company and products.
  • Non traditional methods can also work well if employees are carefully screened.
  • Example Hiring Your First Employees Great people are attracted to work for great leaders and great companies Worst thing you can do is hire the best of a bad bunch, or put someone on staff simply because they're related to you Maximize three personal qualities: Mind Heart Spirit
  • When matching the worker to the task, you first have to have a good idea of what the job entails. In the Job analysis you determine why the job exists, and what you expect from the employee performing the job. A Job Description is found on the next slide.
  • The job description is given to employees to let THEM know what their duties are. Be careful not to limit their tasks to only what is listed, use a line such as “and other tasks as needed” because in a small business flexibility is necessary.
  • A formal process will help evaluate all prospective employees on an even playing field. Using observers or other interviewers will also help by providing other observation you might have missed. Never hire below your standards. If you can’t find a good candidate, consider a temp agency until the position can be filled.
  • Training is important. More knowledgeable skilled employees can perform their jobs more efficiently and correctly.
  • On the job training happens at the work place during the normal course of the day. Salesmen usually shadow other salesmen, as do waitresses, to learn how to deal with customers. Apprenticeships are normal in contracting, electrical, plumbing, and other related fields. Off the job training involves taking courses at local colleges and going to seminars.
  • On the job training happens at the work place during the normal course of the day. Salesmen usually shadow other salesmen, as do waitresses, to learn how to deal with customers. Apprenticeships are normal in contracting, electrical, plumbing, and other related fields. Off the job training involves taking courses at local colleges and going to seminars.
  • Good employees want more than a paycheck. They want to enjoy coming to work every day. They want to be trusted, rewarded, and recognized.
  • Once a business has employees, they must be paid and evaluated. It is recommended that you keep the pay and performance reviews separate.
  • When paying employees find the going wage rates in your market. A temporary agency or employment agency in your area may be able to give you a list of general wage ranges for job types.
  • Bonuses for success are always welcome. While large companies may give stock options, small business owners may not want to give up their control. However, letting employees share in the profits they produced is always welcome. Health insurance is the most requested benefit but it is very expensive. Consider sharing the cost with employees or providing basic coverage and letting them add on extra coverage.
  • Retirement plans encourage longer term employment. And Matching plans are also welcomed. Other, non-financial, rewards are more easily given by cash strapped small businesses.

Transcript

  • 1. 19 Human Resource Management: Small Business Considerations McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 2.
    • Hiring Employees
    • No decision is as important or complex as the decision to hire an employee
    • Of the 25.4 million businesses in the United States in 2004, over 19.5 million had no employees
    • Adding employees increase amount of work that can be done – serving more customers, staying open longer
    Chapter 19 19-
  • 3.
    • Owner and business become responsible for safety and well-being of the employee
      • Legal requirements as an employer
    • What kind of work needs to be done?
      • You can hire either part-time or full-time employees
      • Many additional expenses
        • Carefully balance the ledger
    Chapter 19 19-
  • 4.
    • Employee fit: the match between the needs, expectations, and culture of the small business with the expectations and the skills of the individual employee
      • Let an applicant work part-time for a while so you can see if he/she fits
    • Probationary period: trial period in which an employee has temporary status before a formal offer to work full time is presented
    Chapter 19 19-
  • 5.
    • Attracting Employees
    • Tends to be expensive , so consider less expensive alternatives
      • Networking
      • Internet recruiting
      • Employee referral
      • Company websites
      • Career service offices
    Chapter 19 19-
  • 6.
    • Sources : cont.
      • Professional groups
      • Outsourcing
      • Non-traditional methods :
        • Local churches and pastors
        • Visit local high school for entry-level jobs
        • State unemployment offices
    Chapter 19 19-
  • 7.
    • Example
    • Hiring Your First Employees
    • Great people are attracted to work for great leaders and great companies
    • Worst thing you can do is hire the best of a bad bunch, or put someone on staff simply because they're related to you
    • Maximize three personal qualities:
      • Mind
      • Heart
      • Spirit
    Chapter 19 http://www.entrepreneur.com/startingabusiness/startupbasics/startupbasicscolumnistbradsugars/article171066.html 19-
  • 8.
    • Matching the Work to the Worker
    • Writing a job description : define and discuss all the essential knowledge, skills, and abilities
      • Craft a job analysis :
        • Reason the job exists
        • Mental or physical tasks involved
        • How the job will be done
        • The qualifications needed
    Chapter 19 19-
  • 9.
    • Crafting a Job Description :
      • Start with a title
      • Give a job overview (or a summary of the job)
      • Define the duties and responsibilities
      • Knowledge, skills, and abilities
      • Credentials and experience
      • Special requirements
    Chapter 19 19-
  • 10.
    • Evaluating job prospects : is an individual the right match for the position and your small business
      • Create same specific questions you will ask of all candidates
      • Ask that person to demonstrate their skills
      • Consider involving one or two other interviewers
      • Never hire a moderately qualified just because you need someone now
    Chapter 19 19-
  • 11.
    • Training Your Employees
    • Assess your firm’s training needs
      • Where is training needed? What key areas need the most attention?
      • What specifically must an employee learn in order to be more productive?
      • Who needs to be trained?
    Chapter 19 19-
  • 12.
    • Two broad types of training :
      • On the job :
        • Delivered to employees while they perform their regular jobs
        • Orientations, job instruction training, apprenticeships, internships and assistantships, job rotation, and coaching
      • Off the job:
        • Lectures, special study, videos, television conferences, case studies, role-playing, simulation, programmed instruction, and laboratory training
    Chapter 19 19-
  • 13.
    • Three Guidelines for Training:
      • Give your employees opportunities to use their new skills
        • Owners often hesitate to train employees because afraid they will leave for better job
      • Make training an ongoing process
        • Good employees want to learn
      • Think of training as an investment (as opposed to an expense)
        • Results of sink-or-swim method include costly mistakes, unhappy workers, and low productivity
    Chapter 19 19-
  • 14.
    • Rewarding Employees
    • 5 factors are most valuable to employees:
      • Teamwork : allows people to interact
      • Recognition : showing appreciation, giving credit, incorporate a reward system
      • Training : providing learning opportunities
      • Empowerment : allow employees to use their judgment
      • Contribution : they make a difference
    Chapter 19 19-
  • 15.
    • Reviewing employees’ performance
      • Performance review : once a year to monitor your employee’s job satisfaction, overall performance, and set career objectives
        • Recognize performance, set goals, and set direction
      • Pay review : reward your employees if they have performed all duties and met general requirements
    Chapter 19 19-
  • 16.
    • Compensation and Benefits
    • Determine the organization’s salary philosophy :
      • Find comparison factors for salary
      • Research salary range
      • Determine whether you are competitive
      • Salary.com: or on http://hotjobs.yahoo.com
    Chapter 19 19-
  • 17.
    • Bonuses and long-term incentives : single lump at end of year
      • Profit-sharing plans, stock options, or stock grants
    • Health insurance : not always affordable
      • Sends the message that you care about their health
      • Consider having employees pick up part of the tab
    Chapter 19 19-
  • 18.
    • Retirement plans : 401(k) plans have become popular because they are relatively easy to administer
    • Other incentives :
      • Time off
      • Flexible schedules
      • Sick days / personal days
      • Vacation days
    Chapter 19 19-
  • 19.
    • Entrepreneurial Leadership: leadership really means administration
      • Two key factors: Task and Person
    • Essential to grow any business
      • 75% of businesses in U.S. consist of only the owner; no employees
    • Looks at how you operate as chief executive - 3 components:
      • Innovation
      • Operation
      • inspiration
    Chapter 19 19-
  • 20.
    • Human Resource Issues in Family Business
    • Estimated 95% of businesses are family businesses
    • Two key HR management issues that surface:
      • Striking a balance between nepotism and meritocracy
      • Managing privilege
    Chapter 19 19-
  • 21.
    • Nepotism: a management philosophy of selecting and promoting people based on family ties
    • Meritocracy : a management philosophy of selecting and promoting people based solely on their being the most capable person for the job
    Chapter 19 19-
  • 22.
    • Good HR Practices for All Businesses
      • Key elements of a good HR approach
        • Transparent procedures with consistent application
        • Job basics
        • Job metrics
        • Task repair
        • Lines of communication
        • Clear termination rules
        • Line of appeal
    Chapter 19 19-
  • 23.
    • Dividing up ownership and dividends
    • Owners of corporations often receive the base of their compensation as a salary
      • Also receive dividend from the corporation
    • Family members receive similar packages
      • Higher than non-family members
      • Create profit sharing plans or bonus system for non-family members
    Chapter 19 19-