1. MANAGING HUMAN RESOURCES
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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

2. HUMAN RESOURCE NEEDS HUMAN RESOURCE MANAGEMENT
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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

3. CATEGORIZING HUMAN RESOURCES
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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

4. HUMAN RESOURCE NEEDS Determining employee qualifications
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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.

5. COMPENSATION AND BENEFITS
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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

6. FINANCIAL INCENTIVES Commission Piece rate Base plus incentive
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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

7. EMPLOYEE BENEFITS Benefits State required benefits Health insurance
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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.

8. TRAINING AND DEVELOPMENT
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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

9. PLANNING GROWTH Successful expansion requires planning
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PLANNING GROWTH
Successful expansion requires planning
Reasons for failure:
Lack of money
Owner is not prepared

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

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

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

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

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

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