Tag: HR Essentials for Small Business

Employers Survival Tip #4

Establishing Performance Standards to Achieve Success

Competitiveness, profitability and growth are rooted in the ability of your human capital to execute your strategy. Setting benchmarks for what constitutes success, measuring performance against those benchmarks and finally, rewarding achievement are keys to maximizing the potential of your employees.

So what factors contribute to low performance, low productivity and lack of business success?

Lack of communication, or improper communication greatly contribute to low quality performance and low productivity. Business owners and customers tend to assume that employees and managers see things the same way they do but in reality, not many employees think like business owners because they don’t have the same goals for achievement as an owner does. Creating a crystal clear set of performance standards and communicating it effectively to your employees is the key to business success.

Time Barriers

Unfortunately, due to limited time and resources, businesses owners are typically too busy just focusing on revenue generation, operations and keeping the business growing to really focus on the people that make it possible. Subsequently, small businesses consistently fail to transition to the next level and succeed to their potential. Performance Management is a necessary function of every business to invest the time necessary to accomplish what needs to be done.

Making the Complex Simple

Managing performance involves many complex factors, but can easily be accomplished and scaled down to meet the needs of a small business within the time and resources available to most small business owners. The following steps are foundational to an effective performance management strategy:

  • Determine what needs accomplished, when and who should be responsible
  • Set short term and long term goals, corporately, by department and then individually and break them into small steps
  • Set measurable standards for each goal and make it clear what defines success. Ensure there is consistency between employees with similar duties
  • Communicate in writing what is expected from your employees. Have the employee(s) sign the performance plan. Encourage the employee to take ownership of the goal and be open allow the employee the freedom to choose how to best succeed, within certain boundaries of course
  • Monitor performance on a regular basis, even before the goal is due to determine progress and make adjustments as necessary
  • Avoid linking performance to pay increases or bonuses unless you set up a specific compensation for the performance plan
  • Recognize achievement and completion of goals – recognition drives future performance

Start with the big goals and break them into small goals. Set up a system to review your goals regularly and make adjustments as necessary. Always communicate your goals to your employees and get that “buy-in” factor in place.

Performance Standards Provide Liability Protection

Additionally, failing to set performance goals and measuring performance opens the doors for employer liability. When you have clear documentation illustrating an employee’s shortcomings as compared to organizational/individual goals and objectives and subsequently, to other employee’s performance, you stand a much better chance to defend claims or lawsuits associated with wrongful termination and discrimination.

The primary purpose for goal setting is for everyone to individually succeed, and for the business objectives to succeed. By measuring performance against reasonable goals, the weaknesses in your team will stand out. You can then begin the process of strengthening the weakness or eliminating it.

5 Essential HR Strategies for Small Business

Large businesses have the advantage of resources, time and capital to properly manage their workforce, none of which smaller business has in any abundance. This makes it difficult for small business to maximize productivity, avoid time crushing employee problems and compete on the same stage with their larger counterparts. It may be challenging, but it is essential for small businesses to proactively and effectively manage their workforce. The task boils down to 5 simple strategies that will vastly improve your workforce, your productivity and your profitability.


Know Who You’re Hiring Before They Punch the Clock the First Time
It’s easy to make a bad hiring decision. People are unemployed or looking for a new employer for a variety of reasons so it’s critical you find out why they are looking and why you would want to hire them before you make an offer. Have the post-offer candidate submit to a background check and a drug test before the deal is inked. Diligently check all references. Just a few days and a few bucks could save you from a major headache. Hiring is a process, create one, and follow it.

Orient the New Employee to Your Company, Their Job and Your Expectations
Employees perform more effectively if they know what their job entails, what the company goals and objectives are, and what your employee policies are. Take time when you hire new employees to introduce them to your company, your vision, and your expectations and explain what their role is. Train them on the particulars of their position and what benchmarks they should meet. Be sure to document all orientation and training sessions.

Consistently Manage Employee Performance
Poor employee performance can drag your business down and prevent it from reaching its true potential. It is critical to set positional benchmarks and then measure performance accordingly. Holding periodic performance reviews is important so that employees don’t progress too far into a behavior or habit that is counter to what you are trying to accomplish. Be sure to deal quickly with mediocre performance and create a defensible paper trail. Retrain, monitor and then take quick action on those who are unable to improve.

Accurately Record Hours Worked, Attendance and Employee Status/Changes
Employers must keep accurate time records including hours worked, overtime, vacation, attendance, and tardiness. Additionally, any employee changes including pay, exempt/non-exempt status, job title, pay structure and address changes should be immediately documented and kept on file. Have the employee acknowledge any changes in status or pay and make sure they fully understand the changes. Accurate pay and employee status changes are important to employees as well as most judges and labor boards you may come across during a legal challenge.

Terminate Decisively and Minimize Liability Exposure
Only after careful consideration should you terminate an employee, but when the decision has been made, do not delay the process. Be sure you have pursued all other options with the employee including counseling, disciplinary actions and training. Also, consider any factors that may cause a problem such as protected class (e.g., age, gender, race, religion), workplace injuries, age or other discrimination issues that may be lying under the surface. The employee should never be surprised that they are being terminated is a general rule as is providing all the necessary paperwork to protect your self in the event of a legal challenge.

Of course these are just summaries of employee management strategies but you get the idea. Employee management is important if you want to be the best at what you do. Take the necessary steps in house to develop a strategic employee management program or outsource those tasks that you cannot handle in house.