Entrepreneurship and Small Business Management

1. Entrepreneurship and Small Business Management Chapter 19 Human Resources and Management

2. Ch. 19 Performance Objectives • Describe the 10 basic tasks handled by managers. • Recruit your employees. • Know where and how to find qualified job candidates.

3. Ch. 19 Performance Objectives(continued) • Develop your organizational culture. • Determine your organizational structure. • Understand the functions of human resources management.

4. Tasks Handled by Managers • Planning • Strategic • Tactical • Operational • Organizing • Leading • Directing • Staffing • Controlling • Coordinating • Representing • Innovating • Motivating

5. Ways to Add Employeesto the Business • Bring people in as partners. • Hire experts to accomplish specific tasks on a contractual or hourly basis. • Hire someone as a part-time or full-time employee.

6. Recruiting Process • Defining the job • Job profile identifies the knowledge, skills, and abilities required to perform the specific tasks of the job • Position description includes: • Job profile information • Reporting and working relationships • Goals and objectives of the position • Any special working conditions/requirements

7. Recruiting Process (continued) • Posting and advertising the job • Screening resumes and/or applications • Assessing skills • Interviewing candidates • Checking references • Negotiating compensation • Hiring • Orientation

8. Aspects of the Interview • Welcome and icebreaker • Greeting and “small talk” to put person at ease • Overview of company and position • Formal interview • Core questions that address experiences/actions • Noting what candidate avoids or does not say • Informal interview • Typically peer-to-peer • Less “official” setting (coffee break or meal)

9. Finding Job Candidates • Advertising (internal and external) • Online postings • Campus recruiting • Job fairs • Executive and retained search firms

10. Organizational Culture • Employees’ shared beliefs, values, and attitudes • Can be strategically developed/managed • Conveyed though words, actions, and structures • Should combine best business practices with the desired work environment

11. Organizational Structure • Structure evolves as a company grows: • From simple line organizations (each person reports to one supervisor) • To line and staff organizations (include specialists who assist in management) • Managerial spans of control (number of direct reports) become more defined. • The chain-of-command (reporting hierarchy) becomes more distinct.

12. Management Organizational Chart for a Typical Small Business

13. Encourage Great Work Performance • Find the right people for the right jobs. • Provide fair compensation and good working conditions. • Share your vision for the company. • Give incentives, such as profit sharing. • Offer employees control over their work. • Provide training/development opportunities. • Communicate expectations and goals clearly. • Supply ongoing feedback and recognition.

14. Communicating Effectively • Face-to-face communication • Incorporates verbal and non-verbal messages • Requires using words/terms that are meaningful to your audience • Listening • Grapevine—informal channels of communication • Active listening—focus solely on what the other person is saying, and then validate understanding • Written communication (formal and informal)

15. Human Resources • Company department responsible for: • Staffing • Training and development • Compensation and benefits • Employee relations • Organization development • Other names include HR, Human Capital, and Personnel

16. Organizational Development • Organizational structure • Identify and analyze different options • Establish the appropriate structure • Help manage framework transitions • Employee retention • Develop programs that help build morale • Create mentoring opportunities • Provide professional development • Succession planning for filling positions when employees are promoted, retire, or resign

17. Labor Laws and Taxes • Payroll Taxes: Must be withheld from employee earnings, and then paid to local, state, and federal government as wage taxes and Social Security (FICA) • Equal Pay Act of 1963: Requires employers to pay men and women the same amount for the same work • Fair Labor Standards Act: Requires employers to pay at least minimum wage and not hire anyone full-time who is under 16 • Antidiscrimination laws: Protect employees from discrimination due to age, race, religion, national origin, color, gender, and physical disability

18. Performance Appraisal • Formal process used to evaluate and support employee performance • Provides opportunity to: • Set goals • Assess progress • Identify opportunities for improvement • Plan for individual growth and development • Provide performance feedback

19. Useful HR Strategies • Diversity—Encourage gender and ethnic diversity. • Benchmarking—Evaluate how overall employee performance compares to the competition. • Retention—Develop programs to encourage valued employees to stay with the company.

20. Firing and Laying Off Employees • Unsupported firing exposes your company to wrongful termination lawsuits. • Conduct regular employee performance reviews so you have proof of poor performance. • If an employee violates rules, inform him/her in writing and keep a copy for your records. • If you must lay off employees, offer severance (pay that is continued for a limited time as compensation for being let go).