Human Resource

Management
Small Business Considerations

Chapter 19

McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
 Learning Objectives

LO1 Explore the decision to hire full-time or

part-time help
LO2 Understand how to recruit good
employees on your budget
LO3 Know how to match the right person to
the job
LO4 Learn about employee training methods
and resources

19-2
 Learning Objectives

LO5 Gain insight in meeting employees’ needs

and expectations
LO6 Learn how to develop a fair
compensation and benefit plan
LO7 Understand the complexities of managing
family within your business

19-3
 Hiring Employees

No decision is as important or complex

as the decision to hire an employee
Of the 25.4 million businesses in the
United States in 2004, over 19.5 million
had no employees
Adding employees increase amount
of work that can be done – serving
more customers, staying open longer

19-4
 Question

The match between the needs, expectations,

and culture of the small business with the
expectations and the skills of the individual
employee is called the ___________.
A. Screening test
B. Probationary period
C. Individual match
D. Employee fit

19-5
 Hiring Employees

Employee fit
– the match between the needs,
expectations, and culture of the small
business with the expectations and the
skills of the individual employee

19-6
 Hiring Employees

Probationary period
– trial period in which an employee has
temporary status before a formal offer to
work full time is presented

19-7
 Federal Laws That Apply as
Small Businesses Grow

Figure 19.1

19-8
Federal Employment and Labor Laws
Applicable to Growing Businesses

Table 19.1
19-9
Differences In State Laws: The
Case of Two Adjoining States

19-10
 Attracting Employees

Internet recruiting
– Method of recruiting that allows you to
search a résumé database or post a job
description to the Web;
– a small business owner who knows exactly
what he or she wants can use filters to
search vast numbers of résumés with
pinpoint accuracy.

19-11
 Attracting Employees

Employee referral
– An underused, low-cost method for
finding workers that rewards your
employees for recommending potential
candidates that would be a great
employee fit.

19-12
 Attracting Employees

Virtual employees
– Independent contractors who provide
specialized business services or support
from a distance, through the Internet,
telephone, fax, or another method of
communication.

19-13
 Attracting Employees - Sources

 Networking  Professional groups

 Internet recruiting  Outsourcing
 Employee referral  Local churches
 Company and pastors
websites  Local high school
 Career service for entry-level jobs
offices  State
unemployment
offices
19-14
Matching the Worker to the Work

Job description
– Defines and discusses all the essential
knowledge, skills, and abilities that are
needed to fill a position.

19-15
 Writing a Job Description

Start with a title

Give a job overview
Define the duties and responsibilities
Knowledge, skills, and abilities
Credentials and experience
Special requirements

19-16
 Writing a Job Description

Job analysis should include:

The reason the job exists
The mental or physical tasks involved
How the job will be done
The qualifications needed

19-17
 Evaluating Job Prospects

 Create same specific questions you will

ask of all candidates
 Ask that person to demonstrate their skills
 Consider involving one or two other
interviewers
 Never hire a moderately qualified just
because you need someone now

19-18
 Typical Types of Behaviorally
Based Interview Questions

Figure 19.3

19-19
 Training Your Employees

Where is training needed?

What key areas need the most
attention?
What specifically must an employee
learn in order to be more productive?
Who needs to be trained?

19-20
 Initial and Ongoing Training
Methods
On-the-job training
– Delivered to employees while they
perform their regular jobs
– Techniques include orientations, job
instruction training, apprenticeships,
internships and assistantships, job rotation,
and coaching.

19-21
 Initial and Ongoing Training
Methods
Off-the-job
– Includes lectures, special study, videos,
television conferences, case studies, role-
playing, simulation, programmed
instruction, and laboratory training

19-22
 Three Guidelines for Training

1. Give your employees opportunities to

use their new skills
2. Make training an ongoing process
3. Think of training as an investment as
opposed to an expense

19-23
 23 Rewards Offered Employees
of Small Businesses

Table 19.3

19-24
 Rewarding Employees

Psychological contract
– Refers to employees’ beliefs about the
promises between the employee and the
firm
– Beliefs are based on the perception that
promises have been made in exchange
for certain employee obligations

19-25
 Rewarding Employees

Open-book policy
– Concept that key employees should be
able to see and understand a firm’s
financials
– should have a part in moving the numbers
in the right direction
– should have a direct stake in the strategy
and success of the firm.

19-26
Factors Most Valuable to
Employees
Teamwork

Contribution Recognition

Empowerment Training

19-27
 Compensation, Benefits, and
Perks
Living wage
– The amount needed for a person (or
family of a particular size) to meet the
basic necessities of life from a single job.

19-28
 Compensation, Benefits, and
Perks
Bonuses and Long-Term Incentives
Health Insurance
Retirement Plans
Perks

19-29
 Entrepreneurial Leadership

Entrepreneurial Leadership: leadership

really means administration
– Two key factors: Task and Person
Looks at how you operate as chief
executive - 3 components:
– Innovation
– Operation
– Inspiration

19-30
 Question

A management philosophy of selecting

and promoting people based on
family ties is called __________.
A. Family bias
B. Favoritism
C. Nepotism
D. Meritocracy

19-31
 Human Resource Issues
in the Family Business
Nepotism
– A management philosophy of selecting
and promoting people based on family
ties.
Meritocracy
– A management philosophy of selecting
and promoting people based solely on
their being the most capable person for
the job.

19-32
Good Human Resource Practices
for All Businesses
 Transparent procedures with consistent
application
 Job basics
 Job metrics
 Task repair
 Lines of communication
 Clear termination rules
 Line of appeal

19-33
 Dividing Up Ownership and
Dividends
Owners of corporations often receive
the base of their compensation as a
salary
Family members receive similar
packages
– Higher than non-family members
– Create profit sharing plans or bonus
system for non-family members

19-34