MANAGING HUMAN RESOURCES Chapter 13 4/6/2019 MANAGING HUMAN RESOURCES Unit 6, Part 2 Explain why human resources are important to the success of small business. Identify factors to be considered by a small-business owner when assessing human resource needs. Outline types of compensation and typical benefits for employees. What are Human Resources – when talking about a small business The people who work for a business – they are very important to a small business

HUMAN RESOURCE NEEDS HUMAN RESOURCE MANAGEMENT Chapter 13 4/6/2019 HUMAN RESOURCE NEEDS HUMAN RESOURCE MANAGEMENT ensuring needed employees are available, productive, paid and satisfied with their work CATEGORIZING HUMAN RESOURCES – once hired, an employees salary must be paid whether the company is profitable or not. WHEN TO HIRE? When the employees will contribute more to the company’s profitability than it will cost

CATEGORIZING HUMAN RESOURCES Chapter 13 4/6/2019 CATEGORIZING HUMAN RESOURCES Permanent employee Temporary employee Full-time employee Part-time employee Permanent – has made a long term commitment with company and it is assumed they will remain employed by the company as long as the company is profitable Temporary – hired for a specific period of time or for a specific purpose Full time – regularly works more than 30 hours per week Part time – works less than full time

HUMAN RESOURCE NEEDS Determining employee qualifications Chapter 13 4/6/2019 HUMAN RESOURCE NEEDS Determining employee qualifications Locating new employees Hiring a new employee DETERMINING QUALIFICATIONS - Hire an employee who will benefit company by checking qualifications, will they bring something to the company that is not already there in a current employee LOCATING NEW EMPLOYEES – small businesses often pay less. *Young people looking to gain experience *Older people retired from job looking for more enjoyable employment *Skilled people who desire more decision-making abilities, flexibility, better location, etc. HIRING - much less formal, but specific info should be gathered to determine if the applicant is right for the job.

COMPENSATION AND BENEFITS Chapter 13 4/6/2019 COMPENSATION AND BENEFITS Salary and wages Time wage Straight salary Compensation is the amount of money paid to an employee for work. Salary and wages – direct payment to employee for work completed Time wage – paid hourly for work done Straight salary – a set amount of money for each week or month

FINANCIAL INCENTIVES Commission Piece rate Base plus incentive Chapter 13 4/6/2019 FINANCIAL INCENTIVES Commission Piece rate Base plus incentive Profit sharing Incentives provide the opportunity for employees to increase the quality and/or quantity of work produced. Commission – paying an employee a percentage of sales (salespeople) Piece rate – paid for each unit of work done (factories) Base plus incentives – wage or salary with additional amount determined by performance. Profit sharing – employees receive regular salary plus share of the profits

EMPLOYEE BENEFITS Benefits State required benefits Health insurance Chapter 13 4/6/2019 EMPLOYEE BENEFITS Benefits Health insurance Paid vacations State required benefits Social security Medicare Workers compensation An expensive addition to the cost of compensation An additional30-40% on average of an employees wage is spent on benefits. $10.00 paid to the employee, plus $3-$4 additional paid in benefits = $13-$14 cost to employer Benefits expected by full-time employees, but cannot always be provided by small businesses.

TRAINING AND DEVELOPMENT Chapter 13 4/6/2019 TRAINING AND DEVELOPMENT Training for new employees Training for established employees Training for new employees is usually done by existing employees Training for existing employees can be done by someone hired specifically to train a group of employees Or at a local college

PLANNING GROWTH Successful expansion requires planning Chapter 13 4/6/2019 PLANNING GROWTH Successful expansion requires planning Reasons for failure: Lack of money Owner is not prepared

Why are employees important to the success of a small business?

What factors should be considered by a business owner in determining the need for more employees?

What are some typical types of compensation and benefits for employees?

What are some sources of training available to the employees of small businesses?

Explain each type of compensation: Commission Piece rate Base plus incentive Profit sharing

Which of the previous types of compensation would you prefer, and why?