Staffing and Leading a Growing Company Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Leadership Process of influencing and inspiring others to work to achieve a common goal and then giving them the power and the freedom to achieve it. Entrepreneurs must take on many roles in their companies, but none is more important than that of leader. How do “leadership” and “management” differ? Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Four Vital Tasks of a Leader Hire the right employees and constantly improve their skills Build an organizational culture and structure that enable the company to reach its potential Communicate the vision and the values of the company and create an environment of trust Motivate workers to higher levels of performance Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Vital Task 1 - Hiring the Right Employees Commit to hiring the best talent Elevate recruiting to a strategic position in the company Conduct a job analysis and create practical job descriptions and job specifications Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Conducting a Job Analysis Create a job description – a written statement of the duties, responsibilities, reporting relationships, working conditions, and materials and equipment used in a job Create a job specification – a written statement of the qualifications and characteristics needed for a job, stated in such terms as education, skills, and experience Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Hiring the Right Employees Continued Screen resumes Plan an effective interview Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Planning an Effective Interview Involve others in the interview process Develop a series of core questions and ask them of every job candidate Ask open-ended questions rather than those calling for “yes or no” answers Create hypothetical situations candidates would encounter on the job and ask how they would handle them Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Planning an Effective Interview (Continued) Probe for specific examples in the candidate’s work history that demonstrate the necessary traits and characteristics Ask candidates to describe a recent success and a recent failure and how they dealt with them Arrange a “non-interview” setting in which to observe the candidate Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Conducting an Effective Interview Break the ice. Goal: to diffuse nervous tension Ask questions Keep it legal! Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall The “OUCH” Test Does the question Omit references to race, religion, color, sex, or national origin? Does the question Unfairly screen out a particular class of people? Can you Consistently apply the question to every applicant? Does the question Have job-relatedness and business necessity? Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Conducting an Effective Interview Sell the candidate on the company. Best candidates will have other job offers. Your job: to convince the best candidates that your company is a great place to work Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Hiring the Right Employees Conduct a job analysis and create practical job descriptions and job specifications Plan an effective interview Conduct the interview Check references Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Checking References Checking an applicant’s references is an important part of protecting a company against making a “bad hire” Is it really necessary? Yes!! Background Information Services: More than 50% of job seekers lie on their résumés Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Vital Task 2 - Company Culture Distinctive, unwritten, informal code of conduct that governs the behavior, attitudes, relationships, and style of an organization “The way we do things around here” In small companies, culture plays as important a part in gaining a competitive edge as strategy does Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Characteristics of Positive Company Culture Respect for work and life balance Sense of purpose Diversity Integrity Participative management Learning environment Sense of fun Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Team-Based Management Self-directed work team – a group of workers from different functional areas of a company who work together as a unit largely without supervision, making decisions and performing tasks that once belonged only to managers In this setting, the nature of managers’ work changes dramatically Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Common Errors with Teams Assigning teams inappropriate tasks Failing to provide meaningful performance targets Sabotaging teams with underperformers Failing to compensate team members equitably Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Vital Task 3 - Communicating Effectively Encourage feedback Get out of the office and talk to employees Tell the truth Don’t be afraid to tell employees about the business, its performance, and the forces that affect it Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Communicating Effectively Clarify your message before communicating it Use face-to-face communication whenever possible Be empathetic Match your message to your audience Be organized Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Vital Task 4 - The Challenge of Motivating Workers Empowerment Rewards and compensation Feedback Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Empowerment Involves giving workers at every level of the organization the power, the freedom, and the responsibility to control their own work, to make decisions, and to take action to meet the company’s objectives Requires a different style of management from that of the traditional manager Is built on sharing information (Open-Book Management), authority, and power Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Open-Book Management Employees: See and learn to understand a company’s financial statements and its critical numbers Learn that a significant part of their jobs is moving those critical numbers in the right direction Have a direct stake in the company’s success through profit sharing, ESOPs, or performance-based bonuses Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Rewards and Compensation The key to using rewards to motivate workers is tailoring them to the needs and characteristics of individual workers Money is an effective motivator - up to a point Pay-for-performance systems Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Pay-for-Performance Employees’ incentive pay must be clearly and closely linked to their performances Employees must be able to see the connection between what they do every day on the job and the rewards they receive The system must be simple enough so that employees understand and trust it Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Pay-for-Performance Employees must believe the system is fair The system should be inclusive, rewarding all employees, no matter what their jobs might be The system should make frequent payouts to employees Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Rewards and Compensation Intangible rewards such as praise, recognition, celebrations, and others can be very powerful, yet inexpensive, motivators Ideal for small companies Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

The Feedback Loop Deciding What to Measure Taking Action How to Comparing Actual Performance Against Standards Deciding What to Measure How to Taking Action to Improve Performance Actual Chapter 19 Staffing and Leading Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 19-27

Guidelines for Successful Performance Appraisals Link the employee’s performance to the job description Establish meaningful, job-related, observable, measurable, and fair performance criteria Prepare for the appraisal by outlining the key points you want to cover with the employee Invite the employee to provide an evaluation of his own job performance based on the criteria Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Guidelines for Successful Performance Appraisals (Continued) Be specific Keep a record of employees’ critical incidents - both positive and negative Discuss the employee’s strengths and weaknesses Incorporate employees’ goals into the appraisal Keep the evaluation constructive Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Guidelines for Successful Performance Appraisals (Continued) Praise good work Focus on behaviors, actions, and results Avoid surprises (for both the employee or the business owner) Plan for the future Smart business owners spend about 20% of a performance appraisal discussing past performance and 80% developing goals, objectives, and a plan for improving performance in the future Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall