Human Resource Philosophy for Small Business

Human Resource Management Integrated System

When I ask company owners if they have a human resource system philosophy, too frequently the answer is: Just a blank stare … Or … No, I just like to treat others as I like to be treated. If your idea of performance appraisal is a “showdown” between manager & employee then your HR system is not working. If you don’t see the benefit in having an “off-boarding” process for employees?…. Yes, I said “off-boarding” … then your HR system is not working.

Why do you need an HR management system?…to COMMUNICATE EXPECTATIONS…to yourself, employees, stakeholders and your customers! It encourages open communication; it focuses the employee and the manager toward customer expectations; it acts a planning tool. After all, you will not manage your business by yourself!

The integrated HR system management philosophy focuses on HOW the 4 key elements of PA, S, T&D, M work together. This philosophy uses HR Plan (HRP) & Job Analysis (JA) to gather information that is feed into the Performance Appraisal (PA) which in turn is interlaced with the other three elements of Selection (S), Training & Development (T&D), and Motivation (M). The HRP & JA answer the questions: how many; what type; where found? The answers are used during the integration of the key elements.

Performance Appraisal (PA) starts & ends the integrated HR process. About 70% of employers use annual/biannual performance review systems…based upon recent studies, greater than 50% of employee’s want monthly reviews. The formal review should EMPHASIZE COMMUNICATION: recognize the employee’s unique talents … you can help reduce turnover by adjusting their roles to accommodate their unique strengths. I use a “OneMinuteManager”file to capture employee work outcomes/behaviors communications that happen between reviews…(timely/short/ effective feedback notes). Then, just before the PA meeting, I review the file for “TRENDS”.  This reduces the “meeting halo bias” effect and it also helps focus on the “big picture”. By the way, if the file is empty, that BAD is on me. If the same 3 great accomplishments & 3 do-over things appear on both employee/manager lists (may be not in the same order) … then good communication has been achieved! During the PA, talk together about: the Company strategic plan & the employee’s fit; the employee’s personal plan; explore any new anticipated job openings; obtain their list of suggested new candidates. PA drives S when you tie “needed job skills (soft & hard)” from PA into the selection (S) process. 

During the S interview process, EXPECTATIONS ARE DEVELOPED BY BOTH THE CANDIDATE & EMPLOYER! Setting expectations is like communication … it’s a 2-way street between the candidate/employee & the manager. If those expectations are not met, adjustments need to be made quickly. For instance, managers need to identify T&D needs during S and then hold the employee responsible during PA. Also, knowing that the majority of early career hires plan to leave their current job in the next two years, managers might attempt to minimize the turnover & replacement hiring expectations by having conversations with new hires about what kind of skills they’re looking to develop. The manager should see if there’s some alignment in the company’s needs that fits the applicant’s interests. Also, when interviewing, don’t ask questions that encourage the candidate to tell you what they think you want to hear … this leads the manager to inaccurate expectations of the candidate…best if applicant self evaluates (Sign up for a free mentoring session on theOne-Page Interview Example). Integrity, intellect, initiative are three things to look for when hiring. According to Warren Buffett, the most important is integrity because without it, a company is hurt less by someone dumb and lazy.

Training & Development (T&D) is job skill acquisition or upgrade. Amount spent on T&D is dependent on proficiency of employee selected during the hiring (S) process. New employee on-boarding starts the training process. Create a career development plan for each employee … after assessing S&W during S & PA processes, identify projects/training to hone the skills they want to develop. Focus on-boarding to the company’s purpose of making its customers successful…recruit employees based on their ability to achieve this goal. 

Motivation (M) starts with the Manager. Studies show that people leave managers, not companies … yes, salaries, benefits and “help-me-grow” environments are a good start to retaining employees, but managers are the key and must seek innovative ways to motivate their employees. Managers should always be improving their own job proficiency by researching motivation ideas that align the employee & company goals. Manager communication style is another M tool. Both the manager & employee need to be aware that management communication style must change as the employee becomes more proficient on the job. How communication happens in a “given situation” will often affect employee retention.

As another example of how the integrated system can work, I suggest you start your external candidate search by obtaining RECOMMENDATIONS FROM CURRENT EMPLOYEES…ask during the S & PA processes…find out who they would like to work with.Another place to search for candidates is by REVIEWING PAST SELECTION (S) APPLICANTS for your previous job openings.

Employee retention & hiring is most successful when you utilize an integrated HR philosophy that that is centered around expectations, communication; your customer. How well these 4 key HR elements of Performance Appraisal (PA), Selection (S), Training & Development (T&D), Motivation (M) work together is the key. Most everything done in one of these HR areas affects the others … for instance, (S) will affect the type of onboarding training (T&D) of that new hire. Another example is that the employer job expectations formed during the job analysis (JA) must be communicated in both (S) and (PA) … also used in the T&D. Be sure your managers understand and practice an integrated HR philosophy to help your employees.

For more thoughts on human resource management, view the free video entitled Human Resource Management.

Copyright ©John Trenary 2018

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