Entrepreneurship and Small Business Management Chapter 19 Human Resources and Management

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 2 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Ch. 19 Performance Objectives Describe the 10 basic tasks handled by managers. Recruit your employees. Know where and how to find qualified job candidates.

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 3 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Ch. 19 Performance Objectives (continued) Develop your organizational culture. Determine your organizational structure. Understand the functions of human resources management.

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 4 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Tasks Handled by Managers Planning Strategic Tactical Operational Organizing Leading Directing Staffing Controlling Coordinating Representing Innovating Motivating

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 5 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Ways to Add Employees to 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.

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 6 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Recruiting Process 1.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

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 7 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Recruiting Process (continued) 2.Posting and advertising the job 3.Screening resumes and/or applications 4.Assessing skills 5.Interviewing candidates 6.Checking references 7.Negotiating compensation 8.Hiring 9.Orientation

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 8 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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)

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 9 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Finding Job Candidates Advertising (internal and external) Online postings Campus recruiting Job fairs Executive and retained search firms

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 10 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 11 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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.

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 12 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin Management Organizational Chart for a Typical Small Business

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 13 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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.

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 14 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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)

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 15 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 16 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 17 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 18 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 19 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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.

© 2012 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 20 Entrepreneurship and Small Business Management, 1/e By Steve Mariotti and Caroline Glackin 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).