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HUMAN RESOURCES MANAGEMENT
CHECK POINT 21: THE HUMAN RESOURCES MANAGEMENT PROCESS (OVERVIEW)

Please Select Any Topic In Check-Point 21 Below And Click.

1. the purpose of human resources management
2. who is an employee?
3. who is an independent contractor?
4. who is a sub-contractor?
5. six main functions of the human resources management process
6. steps in the human resources management process
7. equal employment opportunity and compensation laws
8. job analysis
9. job descriptions and job specifications
10. employee planning and forecasting
11. employee recruitment and hiring
12. screening and testing of applicants
13. employment interviews
14. employee orientation
15. employee training
16. management development
17. employee motivation
18. basic job compensation
19. financial incentives
20. employee benefits
21. employee performance appraisal
22. employee career management
23. labor-management relations
24. employee safety and health
25. employee conflict management and separation
26. who is responsible for human resources management?
27. for serious business owners only
28. the latest information online
 

DO I NEED TO KNOW THIS CHECK POINT?

 

WELCOME TO CHECK POINT 21

TUTORIAL 1 General Management TUTORIAL 2 Human
Resources Management
TUTORIAL 3 Financial Management TUTORIAL 4 Operations Management TUTORIAL 5 Marketing
And Sales Management
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96
2 7 12 17 22 27 32 37 42 47 52 57 62 67 72 77 82 87 92 97
3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 78 83 88 93 98
4 9 14 19 24 29 34 39 44 49 54 59 64 69 74 79 84 89 94 99
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
 

HOW CAN YOU BENEFIT FROM CHECK POINT 21?

The main purpose of this check point is to provide you and your management team with a brief overview of the entire Tutorial 2 – Human Resources Management which contains twenty check points.

In this check point you will be introduced to:
The six main functions and steps in the human resources management process.
Equal employment opportunity laws.
Job analysis, job descriptions, and job specifications.
Employee planning, forecasting, recruiting, and hiring.
Screening and testing of applicants and employment interviews.
Employee orientation and training.
Management development and employee motivation.
Basic job compensation, financial incentives, and employee benefits.
Employee performance appraisal and career management.
Labor-management relations, employee safety and health… and much more.
 

LEAN MANAGEMENT GUIDELINES FOR CHECK POINT 21

You and your management team should become familiar with the basic Lean Management principles, guidelines, and tools provided in this program and apply them appropriately to the content of this check point.

You and your team should adhere to basic lean management guidelines on a continuous basis:
Treat your customers as the most important part of your business.
Provide your customers with the best possible value of products and services.
Meet your customers' requirements with a positive energy on a timely basis.
Provide your customers with consistent and reliable after-sales service.
Treat your customers, employees, suppliers, and business associates with genuine respect.
Identify your company's operational weaknesses, non-value-added activities, and waste.
Implement the process of continuous improvements on organization-wide basis.
Eliminate or minimize your company's non-value-added activities and waste.
Streamline your company's operational processes and maximize overall flow efficiency.
Reduce your company's operational costs in all areas of business activities.
Maximize the quality at the source of all operational processes and activities.
Ensure regular evaluation of your employees' performance and required level of knowledge.
Implement fair compensation of your employees based on their overall performance.
Motivate your partners and employees to adhere to high ethical standards of behavior.
Maximize safety for your customers, employees, suppliers, and business associates.
Provide opportunities for a continuous professional growth of partners and employees.
Pay attention to "how" positive results are achieved and constantly try to improve them.
Cultivate long-term relationships with your customers, suppliers, employees, and business associates.

1. THE PURPOSE OF THE HUMAN RESOURCES MANAGEMENT PROCESS

THE PURPOSE OF HUMAN RESOURCES MANAGEMENT

Business owners and managers must be fully familiar with the development, implementation, and maintenance of the human resources management process which represents one of the most critical managerial tasks in every business.

The main purpose of Human Resources Management is:

 
1. To plan, organize, direct, and control effective utilization of human resources within an organization. These resources are the employees who provide the organization with their work, skills, talent, creativity, and motivation.
   
2. To ensure that all employees perform their duties and responsibilities effectively and in accordance with the organization's objectives.
   
3. To ensure that suitable employees are placed in correct positions within the organization to maximize its performance.
 

ADDITIONAL INFORMATION ONLINE

A Day Of The Life Of HR By PeopleStreme.
Ten Best Practice HR Tips By Meet The Boss.
What Is Human Resource Management? By Armin Trost.
Introductory Human Resource Concepts By Soma Jurgensen.
What Is Human Resources Management? By Meghan Lynn Allen, About.com.

2. WHO IS AN EMPLOYEE?

IMPORTANCE OF CORRECT CLASSIFICATION OF HUMAN RESOURCES

In these days of ”Contingent Workforce”, companies sometimes misclassify workers by calling them "contract workers" rather than employees. Both, the Internal Revenue Service (IRS) and the U.S. Department Of Labor can sanction employers with stiff fines and penalties for such misclassification.

It is essential, therefore, that you and your management team understand how to classify a broad range of human resources available to your organization. These resources may include four types outlined below.

FOUR TYPES OF HUMAN RESOURCES AVAILABLE TO A COMPANY

Common-Law Employees Independent Contractors Statutory
Employees
Statutory
Non-Employees
 
It is also important that you and your management team get a better understanding in developing and cultivating Internal Resources within your organization outlined below.

WHO IS AN EMPLOYEE?

An Employee, in general, is a person who works under the company's direct management supervision during hours set by the company, doing work on the company's premises, using materials, tools, and other equipment provided by the company, and being paid by the hour, week, or month. Sometimes, an employee may do a certain amount of work from home, depending upon specific circumstances and the nature of the company's business.

Some of the important issues related to employees are outlined below.

IMPORTANT ISSUES RELATED TO EMPLOYEES

1.

An employee receives his or her compensation from the company on a "net-pay" basis, i.e. after taxes.

2.

The company must withhold appropriate amounts of federal and state taxes and other deductions, and make its own contributions in accordance with the prevailing federal and state laws.

3.

An employee is entitled to receive various benefits offered by the company, such as paid leave, paid public holidays, insurance, etc.

ADDITIONAL INFORMATION ONLINE

You can obtain additional information about a broad range of issues related to employees online:

U.S. Department Of Labor
Internal Revenue Service (IRS)

3. WHO IS AN INDEPENDENT CONTRACTOR?

WHO IS AN INDEPENDENT CONTRACTOR?

An Independent Contractor, in general, is a person who may work for any number of companies without limitation. The independent contractor does not work under direct control of a specific company, and for this reason he or she is not considered an employee. 

The duration of work period and compensation are specified in advance and agreed upon between the company and the independent contractors. Some of the important issues related to independent contractors are outlined below.

IMPORTANT ISSUES RELATED TO INDEPENDENT CONTRACTORS

1.

The independent contractor is not entitled to any benefits such as employee benefits, leave pay, or insurance.

2.

The independent contractor receives compensation on a "gross-pay" basis, i.e. before taxes.

3.

At the end of the work period, the independent contractor is expected to be paid in full by the company.

4.

The independent contractor is fully responsible for his or her own taxes to the IRS.

5.

At the end of the fiscal year, the company must issue a 1099 Form to the independent contractor (a copy must be sent to the IRS) in the amount equal to total gross earnings in order to comply with the IRS requirements.

 

THE IRS COMMON LAW TEST TO DETERMINE WHETHER THE
WORKER IS AN EMPLOYEE OR AN INDEPENDENT CONTRACTOR

IRS Common Law Test Questions

Individual Is Generally:

An Employee
 If The Answer
is "Yes"

An Independent
Contractor If The Answer  Is "No"

1.

Must comply with the employer’s instructions about the work.

   

2.

May receive training from or at the direction of the employer.

   

3.

Provides services that are integrated into the business.

   

4.

Provides services that must be rendered personally.

   

5.

Hires, supervises, and pays employees on behalf of the employer.

   

6.

Has a continuing working relationship with the employer.

   

7.

Must follow set working hours.

   

8.

Works full-time for the employer.

   

9.

Does his or her work on the employer’s premises.

   

10.

Must do his or her work in a sequence set by the employer.

   

11.

Must submit regular reports to the employer.

   

12.

Receives payments of regular amounts at set intervals.

   

13.

Receives payments for business and/or travel expenses.

   

14.

Relies on the employer to furnish tools and materials.

   

15.

Lacks a major investment in facilities used to perform the service.

   

16.

Cannot make a profit or suffer a loss from his or her services.

   

17.

Works for one employer at a time.

   

18.

Does not offer his or her services to the general public.

   

19.

Can be terminated by the employer.

   

20.

May quit work at any time without incurring liability.

   

ADDITIONAL INFORMATION ONLINE

You can obtain additional information about independent contractors online:

The IRS Definition Of An Employee.
The IRS Definition Of Independent Contractor.
The IRS: Employee Or Independent Contractor?
The IRS Self-Employed Individuals Tax Center.

4. WHO IS A SUB-CONTRACTOR?

WHO IS A SUB-CONTRACTOR?

A Sub-Contractor is an independent person or business entity who provides specialized service to a company on a sub-contracting basis. Upon completion of work, the sub-contractor is expected to be paid by the company in full in accordance with a contract or sub-contract agreement. 

Similarly to the independent contractor, the sub-contractor is fully responsible for his or her taxes to the IRS. All other provisions related to the independent contractors described above, also apply to sub-contractors.

ADDITIONAL INFORMATION ONLINE

You can obtain additional information about independent contractors online:

The IRS Definition Of An Employee.
The IRS Definition Of Independent Contractor.
The IRS: Employee Or Independent Contractor?
The IRS Self-Employed Individuals Tax Center.

5. SIX MAIN FUNCTIONS OF THE HUMAN RESOURCES MANAGEMENT  PROCESS

THE HUMAN RESOURCES MANAGEMENT PROCESS

Planning and control of the Human Resources Management Process entails a number of steps which fall under six main functions outlined below.

SIX MAIN FUNCTIONS OF THE HUMAN RESOURCES MANAGEMENT

1.

Staffing.
This is the process of obtaining suitable people to accomplish company objectives.

2.

Development.
This is the process of training designed to ensure high performance by employees in the company.

3.

Compensation.
This is the process of establishing a fair and equitable level of employee remuneration for their contribution toward the accomplishment of the organizational objectives

4.

Integration.
This is the process of ensuring a positive level of attitudes toward work and harmony within the company.

5.

Maintenance.
This is the process of ensuring the continuation of adequate working conditions for employees within the company.

6.

Conflict Management And Separation.
This is the process of handling any type of conflict among employees and their discharge.

6. STEPS IN THE HUMAN RESOURCES MANAGEMENT PROCESS

THE HUMAN RESOURCES MANAGEMENT PROCESS

The Human Resources Management Process entails a number of steps which are summarized below.

STEPS IN THE HUMAN RESOURCES MANAGEMENT PROCESS

Step 1: Be Familiar With Equal Employment Opportunity Laws.

Step 2: Determine Duties And Skill Requirements For Various Positions Within The Company.

Step 3: Prepare Job Descriptions And Job Specifications.

Step 4: Identify Short-, Medium-, And Long-Term Employee Requirements.

Step 5: Initiate And Maintain Effective Employee Recruitment And Hiring Procedures.

Step 6: Establish And Maintain Sound Procedures For Screening, Testing, And Interviewing Applicants.

Step 7: Develop And Implement An Effective Employee Orientation Program.

Step 8: Establish And Maintain Effective Employee Training, Development, And Motivation Programs.

Step 9: Develop And Implement Effective Employee Compensation Plans.

Step 10: Establish And Maintain Effective Employee Evaluation Procedures.

Step 11: Develop Suitable And Effective Career Management Programs.

Step 12: Establish Sound Labor-Management Relations And Be Aware Of Labor Unions.

Step 13: Develop And Maintain Effective Employee Safety And Health Procedures.

Step 14: Maintain Effective Employee Conflict Management Procedures.

Step 15: Maintain Sound And Legally-Proof Employee Separation Procedures.

7. EQUAL EMPLOYMENT OPPORTUNITY AND COMPENSATION LAWS

EQUAL EMPLOYMENT OPPORTUNITY AND COMPENSATION LAWS

The human resources management process must be developed in accordance with various employment and compensation laws. The most important Equal Employment Opportunity And Compensation Laws are outlined below.

Equal Employment Opportunity Laws
are discussed in detail in Tutorial 2.

Compensation And Benefits Laws
are also discussed in detail in Tutorial 2.

EXAMPLES OF EQUAL EMPLOYMENT OPPORTUNITY LAWS

1.

Title VII Of The 1964 Civil Rights Act.

2.

The Age Discrimination In Employment Act Of 1967.

3.

The Vocational Rehabilitation Act Of 1973.

4.

The Vietnam Era Veterans’ Readjustment Assistance Act Of 1974.

5.

The Pregnancy Discrimination Act Of 1978.

6.

The Civil Rights Act Of 1991.

7.

The Americans With Disabilities Act Of 1990.

8.

The ADA Amendments Act Of 2008.

9.

Various State Laws.

 

EXAMPLES OF COMPENSATION AND BENEFITS LAWS

1.

The Social Security Act Of 1935.

2.

The Fair Labor Standards Act Of 1938.

3.

The Equal Pay Act Of 1963.

4.

The Employee Retirement Income Security Act Of 1974.

5.

Workers Compensation Laws.

8. JOB ANALYSIS

JOB ANALYSIS

Job Analysis is a very important element of the human resources management process in every business organization. In many medium-sized and larger companies this task is usually carried out by a Human Resources Manager. However, the majority of small business owners, who may also act as human resources manager, usually have little knowledge, if any, about the basic principles of job analysis and how to implement it within their organizations.

Job analysis needs to be conducted for two types of positions within the company as outlined below.

JOB ANALYSIS FOR TWO TYPES OF POSITIONS

1.

Job analysis for employee positions.

2.

Job analysis for managerial positions.

 

IMPLEMENTATION OF JOB ANALYSIS

Job analysis for employee positions entails identifying the specific job, summarizing responsibilities and duties which need to be performed, determining the level of skills and experience requirements, summarizing the standards of performance, level of supervision, machine and tool requirements, and working conditions.

Job analysis for managerial positions entails identifying the specific managerial function, summarizing the level of accountability, responsibilities and duties which need to be performed, determining the level of managerial experience requirements, summarizing the standards of performance, outlining the details of work with subordinates and relationship with other managers within the organization.

All duties and skills need to be specified in accordance with the company's overall operational plans for the current fiscal period. Moreover, allocation of duties, responsibilities, and accountability will depend upon the specific nature of the company's existing Organizational Chart. This chart represents another essential management tool, which should be prepared by small business owners.

Job analysis can be implemented by means of a well-designed Job Analysis Questionnaire. A properly conducted job analysis will provide the business owners with two essential documents for various positions within the organization:

  • Job Description.
  • Job Specification.

Job Analysis is discussed in detail in Tutorial 2.

9. JOB DESCRIPTIONS AND JOB SPECIFICATIONS

TWO PRODUCTS OF JOB ANALYSIS

A comprehensive Job Analysis enables management to prepare detailed Job Descriptions and Job Specifications for various positions within the company as described below.

JOB DESCRIPTIONS AND JOB SPECIFICATIONS

 
Job Description   Job Specification

Job description lists all relevant duties, responsibilities, authority, and accountability of a specific job.

 

Job specification outlines the minimum level of skills, knowledge, experience, education, and abilities necessary to ensure acceptable standard of work.

 

THE IMPORTANCE OF JOB DESCRIPTIONS AND JOB SPECIFICATIONS

A well-prepared job description represents an essential tool which provides business owners and managers with an effective way of instructing employees regarding the work that has to be performed. Moreover, managers frequently use job descriptions to facilitate a sound management control over employees’ performance within the organization.

Job specifications are very helpful in identifying the specific type of employees, which may be required by the company to meet its organizational objectives. Thus, when a new position becomes available, this document will provide guidance to business owners and managers during the employee hiring process.

The majority of small business owners must pay more attention to the development of job descriptions and job specifications within their organizations. These two documents play an important role in the process of employee planning and forecasting, employee hiring and orientation, development of employee training programs, employee performance appraisal and career development programs, and modification of the organizational and management structures.

Job Descriptions And Job Specifications are discussed in detail in Tutorial 2.

10. EMPLOYEE PLANNING AND FORECASTING

EMPLOYEE PLANNING AND FORECASTING

Once various job descriptions and job specifications are prepared, management needs to proceed with planning and forecasting of employee requirements.

The main purpose of the Employee Planning And Forecasting Process is to identify future staffing requirements, to secure the availability of specific types of employees with skills, experience, and background necessary to meet the company’s operational objectives. This process consists of two stages described below.

TWO STAGES OF THE EMPLOYEE PLANNING AND FORECASTING PROCESS

1.

Employee demand forecasting.

2.

Employee supply forecasting.

The employee planning and forecasting process entails consideration of several factors, such as budget limitations, sales demands, operational requirements, economic situation, and capabilities of existing employees. This process can be accomplished by using several useful reports and charts outlined below.

DOCUMENTS USED IN THE EMPLOYEE PLANNING AND FORECASTING PROCESS

• Employee Allocation Status Report.

  • This report summarizes details about current employees within the organization, their position, period of employment, details of compensation, and need for possible replacement.

• Employee Requirements Report.

  • This report summarizes details of short-term requirements for new employees, their position, details of compensation, and requirement date.

• Management Replacement Chart.

  • This chart summarizes details about current management personnel within the company, the level of their current performance and promotion potential.

• Employee Record.

  • This record contains detailed information about every employee within the company, their age, address, family details, education, special skills, work history, professional training, and additional relevant information.

Employee Planning And Forecasting is discussed in detail in Tutorial 2.

11. EMPLOYEE RECRUITMENT AND HIRING

EMPLOYEE RECRUITMENT AND HIRING

Upon completion of the human resources planning and forecasting, management must initiate the process of recruiting and hiring suitable employees.

The main objective of Employee Recruitment And Hiring is to meet the company's specific requirements and employ people in accordance with existing organizational objectives. Suitable employees can be recruited from outside the organization or promoted from within, thereby stimulating an improved level of motivation among current employees.

The employee recruitment and hiring process represents one of the most important and challenging tasks for every business owner. This process entails a number of steps outlined below.

STEPS IN THE EMPLOYEE RECRUITMENT PROCESS

1.

Completion of a job application by a prospective employee.

2.

Checking relevant references.

3.

Testing and selection of prospective employees.

4.

Employment interviews.

5.

Confirmation of employment acceptance.

6.

Applicant's induction and orientation.

Business owners use a Job Application Form during the process of hiring new employees. This form represents an important tool in the hiring process and it contains details outlined below.

JOB APPLICATION FORM DETAILS

1.

Personal information.

2.

Details of education, special training, and awards.

3.

Details of employment during the last 10 years.

4.

Details of self-employment experience.

5.

Details of military service.

6.

Social interests.

7.

Personal preferences.

8.

Conviction record.

 

LEGAL COMPLIANCE DURING THE EMPLOYEE RECRUITMENT AND HIRING PROCESS

The employee recruitment and hiring process must be conducted in accordance with the prevailing Equal Employment Opportunity, Compensation, And Benefits Laws to ensure that the company complies with various legal requirements. Business owners must also use an Equal Employment Opportunity Disclaimer Letter and request that applicants provide additional information on a strictly voluntary basis.

Finally, business owners must adhere to all legal requirements, imposed by the Immigration And Naturalization Services (INS) regarding hiring employees with legal authorization for employment in the U.S.A.

Employee Recruitment And Hiring is discussed in detail in Tutorial 2.

12. SCREENING AND TESTING OF APPLICANTS

SCREENING AND TESTING OF APPLICANTS

Screening And Testing Of Applicants represents the final stage of the employee recruiting and hiring process. The main purpose of screening of applicants is to enable management to check the accuracy of information submitted by prospective employees, to evaluate their background, character, professional competence, experience, and to minimize costly mistakes during the hiring process.

A properly conducted screening process entails a Reference Check regarding the information submitted by prospective employees. However, the reference check may sometimes present a real challenge to business owners for several reasons. First, many former employers do not provide written "recommendations" to their future ex-employees, unless this is a genuine downsizing or closure of a particular business. Second, when a written reference is given by former employers, it usually does not provide sufficient details due to existing legal restraints.

For this reason business owners and managers must learn how to become good "investigators" to ensure that they are conducting the reference check in a professional manner and strictly in accordance with specific legal requirements. Some of the important guidelines for conducting effective reference checks are included in the Ten Commandments For Conducting A Reference Check Of Applicants.

METHODS FOR SCREENING AND TESTING OF APPLICANTS

Effective methods for screening of applicants may include telephone or personal interviews with former employers. Business owners and managers need to know which questions to ask and how to ask these questions in an appropriate manner. A Telephone Or A Personal Interview Form is frequently used for this purpose.

Business owners and managers should also know how to provide References regarding their former employees to other organizations. It is essential to be familiar with Employment Reference Procedures and various laws which may affect this process. For this reason, it is essential to be aware of what specific information about former employees can be disclosed to others to avoid any potential legal liability.

The hiring procedure often entails Preliminary Testing Of Applicants. The prime objective of such testing is to evaluate the applicants' professional and mental suitability for existing employment requirements and adaptability to future demands. Another type of testing may specifically relate to possible use of illegal substances by prospective employees. There are several types of tests, which can be used for these purposes. Business owners and managers must ensure that all these tests are conducted strictly in accordance with the prevailing legal requirements.

Screening And Testing Of Applicants is discussed in detail in Tutorial 2.

13. EMPLOYMENT INTERVIEWS

EMPLOYMENT INTERVIEWS

One of the central elements of the hiring process is conducting of Employment Interviews which enable business owners and managers to "size-up" applicants and to evaluate their individual qualifications before completing the employee selection process. 

There are several types of employment interviews frequently used by business owners and managers as outlined below.

TYPES OF EMPLOYMENT INTERVIEWS

1.

A non-directive interview.

2.

A patterned interview.

3.

A structured interview.

4.

A serialized interview.

Each type of interview has its own advantages and disadvantages, and can be effectively used by the company’s management to ensure positive selection results. Irrespective of the method used, it is important to avoid making Common Interviewing Mistakes during the hiring process to ensure the selection of the most suitable applicants.

An effective Employment Interview Process entails a number of steps outlined below.

STEPS IN THE EMPLOYMENT INTERVIEW PROCESS

1.

Plan the interview.

2.

Establish a friendly atmosphere.

3.

Ask the right questions.

4.

Close the interview.

5.

Review the interview.

6.

Select the most suitable candidate.

7.

Prepare a letter of appointment.

Business owners and managers must not underestimate the importance of effectively conducted employment interviews, because they will determine the overall success of their organization.

Employment Interviews are discussed in detail in Tutorial 2.

14. EMPLOYEE ORIENTATION

EMPLOYEE ORIENTATION

Once the selection of applicants is completed, each new employee must undergo the process of Employee Orientation.

The main purpose of employee orientation is to ensure the smooth integration of new employees into the existing organizational structure. This process involves a formal introduction of employees to the company's rules and procedures, familiarization with their jobs and benefits, and meeting fellow employees. Specific details of employee orientation usually depend upon the status of a new employee within the organization.

The employee orientation process may take a few minutes or several hours, depending upon the company's size and employee position within the organization. Management in various companies should develop an Orientation Program in accordance with their company's specific objectives. This program may include two types of orientation items described below.

TWO TYPES OF ORIENTATION ITEMS

• General Orientation Items.

This may include overview of the company, policies, procedures and rules, compensation and employee benefits, safety procedures, labor union (if applicable), and physical facilities.

Specific Departmental Orientation Items.

This may include overview of the department, departmental policies, procedures and rules, job duties and authority, departmental tour, introduction to co-workers.

The actual sequence of orientation procedures should be summarized in an Orientation Program Checklist in accordance with the company's specific organizational requirements. This checklist could be very useful in enabling management to conduct employee orientation in a structured manner and to ensure successful "conversion" of new employees into valuable assets within the company.

Employee Orientation is discussed in detail in Tutorial 2.

15. EMPLOYEE TRAINING

EMPLOYEE TRAINING

Some new employees are not always entirely suited to their jobs and may require additional training. It is a prime function of business owners and managers to identify the need for additional Employee Training to ensure effective operational performance.

Assessment of individual Employee Training Requirements can be accomplished through several methods described below.

METHODS FOR ASSESMENT OF EMPLOYEE TRAINING REQUIREMENTS

1.

Job analysis.

2.

Task analysis.

3.

Performance analysis.

Once the employee training requirements are established, the company's management should proceed with the selection of the most appropriate employee training methods. Moreover, business owners and managers should also be familiar with the Ten Commandments Of Learning to ensure that the selected training methods provide maximum contribution to the company's overall performance.

Some of the most popular Employee Training Methods are outlined below.

EMPLOYEE TRAINING METHODS

1.

On-the-job training.

2.

In-house training programs.

3.

Apprenticeship training programs.

4.

Educational courses.

Upon the completion of a specific employee training program, management must conduct a thorough Evaluation Of Training Results. This represents an essential part of the entire training process and it is designed to ensure a high quality of future employee training programs within the organization.

Employee Training is discussed in detail in Tutorial 2.

16. MANAGEMENT DEVELOPMENT

MANAGEMENT DEVELOPMENT

In addition to the implementation of the employee training programs, it is necessary to initiate and to maintain a continuous Management Development Process within the organization.

The prime purpose of the management development process is to maximize the managers' abilities in performing their duties effectively and in providing sound guidance to their subordinates. The scope of this process depends upon the size of the organization and the number of employees.

The success of a one-person small business certainly depends upon the business skills of the owner. However, when the management team consists of several partners or managers, it is essential to ensure that each one is capable to provide maximum contribution to the overall success of the organization. Subsequently, Management Development Needs may be classified as described below.

CLASSIFICATION OF MANAGEMENT DEVELOPMENT NEEDS

1.

Management development needs for executive level managers.

2.

Management development needs for middle level managers.

3.

Management development needs for supervisory level managers.

There are several Management Development Methods, which are frequently used by small business owners as outlined below.

MANAGEMENT DEVELOPMENT METHODS

1.

Managerial-on-the-job training.

2.

Professional management coaching.

3.

Job rotation.

4.

Seminars, workshops, and self-study courses.

5.

Business schools and colleges.

Management Development is discussed in detail in Tutorial 2.

17. EMPLOYEE MOTIVATION

EMPLOYEE MOTIVATION

Another important managerial responsibility relates to motivating employees to perform their duties in the most efficient manner.

Employee Motivation entails understanding of basic human needs and development of suitable employee motivation methods. Abraham Maslow, a world-renowned psychologist, identified the following Basic Human Needs described below.

BASIC HUMAN NEEDS

1.

Physiological needs.

2.

Safety needs.

3.

Social needs.

4.

Ego needs.

5.

Self-actualization needs.

Business owners and managers must develop a strong appreciation for employees' basic needs and use this understanding in developing the most cost-effective Employee Motivation Methods. Some of the most popular employee motivation methods are outlined below.

EMPLOYEE MOTIVATION METHODS

1.

Attractive remuneration.

2.

Employee benefits.

3.

Work security.

4.

Interpersonal functional relations.

5.

The opportunity to advance.

6.

Work challenge and satisfaction.

7.

Safe and comfortable working conditions.

8.

Correct guidance and reasonable orders.

9.

Credit for good performance.

10.

Sound social organizational structure.

Business owners and managers should become familiar with prudent motivational guidelines to ensure sound Labor-Management Relations within the organization and continued long-term growth of the company.

Employee Motivation is discussed in detail in Tutorial 2.

18. BASIC JOB COMPENSATION

BASIC JOB COMPENSATION

One of the essential management functions is to provide Job Compensation to employees. The prime purpose of basic job compensation is to attract suitable employees to the organization, to motivate employees toward accomplishing superior performance, and to retain employees’ services for a required period of time to meet the company’s objectives.

The Job Compensation Plan must be developed in accordance with the Equal Employment Opportunity And Compensation Laws. Business owners and managers must also be familiar with The Fair Labor Standards Act, which relates to minimum wages, overtime pay, record-keeping and child labor standards. The job compensation plan consists of three main elements outlined below.

THREE ELEMENTS OF THE JOB COMPENSATION PLAN

1.

Basic job compensation.

2.

Financial incentives.

3.

Employee benefits.


BASIC JOB COMPENSATION STRUCTURE

The ultimate objective of a good job compensation plan is the development of a meaningful and competitive salary, wage, and commission structure in accordance with the company's existing financial conditions and overall organizational objectives. To ensure consistency in salary, wage, and commission structure, management needs to establish a systematic relationship among basic compensation rates by evaluating various jobs within the company.

Several factors may affect the Basic Job Compensation Structure, including the principle of labor supply and demand, labor unions, the company's financial conditions, and cost-of-living factors. The basic job compensation structure development process entails the following five steps outlined below.

STEPS IN THE BASIC JOB COMPENSATION STRUCTURE DEVELOPMENT PROCESS

1.

Conduct a salary and wage compensation survey.

2.

Evaluate a range of jobs.

3.

Group similar jobs into pay grades.

4.

Allocate pay rates to each grade.

5.

Fine tune pay rates.

Small business owners usually take a short-cut and, instead of conducting the abovementioned process, simply use Salary And Compensation Surveys, which are available from various sources online.

Basic Job Compensation is discussed in detail in Tutorial 2.

19. FINANCIAL INCENTIVES

FINANCIAL INCENTIVES

Financial Incentives represent the second essential element of the Job Compensation Plan in any organization.

In addition to providing basic job compensation, business owners and managers need to develop and implement a cost-effective Financial Incentives Plan for their employees. A financial incentives plan provides management with an important tool, which they can use to motivate employees to achieve superior results within the organization.

There are four basic types of financial incentives, which are frequently used by managers in various industries as described below.

FOUR TYPES OF FINANCIAL INCENTIVES

• Financial Incentives For Production Employees.

  • This may include a piece-rate plan, a standard-hour plan, a pay-for-knowledge plan, and a group incentive plan.

• Financial Incentives For Managers.

  • This may include short-term incentives, such as bonuses, and long-term incentives, such as stock options, book value plan, stock appreciation rights plan, performance achievement plan, restricted stock plan, and phantom stock plan.

• Financial Incentives For Sales Employees.

  • This may include a straight salary plan, a straight commission plan, and a salary-commission combination plan.

• Financial Incentives For Professional Employees.

  • This may include a profit-sharing plan, a deferred profit-sharing plan, an employee stock ownership plan (ESOP), and a production sharing plan.

Business owners and managers need to pay serious attention to the development of practical and simple to understand financial incentive plans designed not only to motivate managers and employees, but, at the same time to ensure the long-term success and profitability of the entire organization.

Financial Incentives are discussed in detail in Tutorial 2.

20. EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

Employee Benefits represent the third essential element of the Job Compensation Plan in any organization.

Many business owners appreciate the importance of offering a comprehensive Employee Benefits Plan designed to attract well-qualified employees and managers to their organization. All employee benefits can be classified into the following four categories described below.

FOUR CATEGORIES OF EMPLOYEE BENEFITS

• Non-Working Time Benefits.

  • This may include vacation and holiday pay, sick leave pay, severance pay, and unemployment insurance compensation.

• Insurance Benefits.

  • This may include Workers Compensation, hospitalization, medical and disability insurance, life insurance, and long-term care insurance.

• Retirement Benefits.

  • This may include the Social Security Program benefits and retirement plans, such as SEP-IRAs, Keogh Plans, 401(k) Plans and 403(b) Plans.

• Service Benefits.

  • This may include social or legal counseling, subsidized cafeteria, subsidized or free employee transportation, subsidized or free sports facilities, subsidized or free child care and dependent care, company car and gas, travelling and entertainment allowances, low interest or free interest loans, discounts on the purchase of the company's products or services, and subsidized computer and online access services.

Business owners need to be aware of various types of tax-deductible benefits, which can be offered to managers and employees, designed to provide additional motivation and at the same time improve the company's chances for a long-term success.

Employee Benefits are discussed in detail in Tutorial 2.

21. EMPLOYEE PERFORMANCE APPRAISAL

EMPLOYEE PERFORMANCE APPRAISAL

Business owners and managers also need to implement the process of a regular appraisal of employees within the organization.

Employee Performance Appraisal enables management to provide employees with feedback on their performance and to identify their strengths and weaknesses in various areas of work. Moreover, regular appraisals of employees help management to identify suitable candidates for promotion, to regulate compensation levels, and to develop suitable training programs. This process also helps management to identify employees who are not performing in accordance with the operational requirements and subsequently may become candidates for replacement.

Many business owners use a simple Employee Performance Appraisal Method known as Descriptive Rating Scale Method. This method is based on several factors of rating employees’ performance outlined below.

EMPLOYEE PERFORMANCE APPRAISAL FACTORS

1.

Quality of work.

2.

Productivity.

3.

Planning and scheduling of work.

4.

Required supervision.

5.

Attitude.

6.

Communication.

7.

Attendance.

8.

Conservation.

Management Performance Appraisal is equally important in every organization to identify existing strengths and weaknesses among management personnel and to ensure that any performance deficiencies are corrected as soon as possible. This process can be conducted using the same method, only applying it to different set of factors outlined below.

MANAGEMENT PERFORMANCE APPRAISAL FACTORS

1.

Planning skills.

2.

Organizing skills.

3.

Leading skills.

4.

Controlling skills.

5.

Productivity.

6.

Attitude.

7.

Communication skills.

8.

Attendance.

The ultimate result of an effective employee and management appraisal can be summarized in a Performance Appraisal Status Report. This, in turn will enable the company's management team to develop the most appropriate Plan Of Action, designed to improve the operational performance in the shortest period of time.

Employee Performance Appraisal is discussed in detail in Tutorial 2.

22. EMPLOYEE CAREER MANAGEMENT

EMPLOYEE CAREER MANAGEMENT

Another important element of human resources management process entails developing new career opportunities for employees within the organization.

All career opportunities should be incorporated into an effective Employee Career Management Program to ensure a long-term retention of good employees. This, in turn, will help management to reduce the employee turnover rate and maximize the overall employee efficiency within the organization.

The main purpose of the employee career management program is to ensure steady functional growth of employees, to maintain high morale and motivation, and to improve utilization of human resources within the organization.

Business owners must take into consideration Five Life Cycle Stages to ensure a meaningful employee career management process within their company. These five stages are outlined below.

FIVE LIFE CYCLES STAGES

1.

The growth stage.

2.

The exploration stage.

3.

The establishment stage.

4.

The maintenance stage.

5.

The decline stage.

Moreover, business owners and managers need to take into consideration the following Six Basic Types Of Personal Orientation to ensure a successful employee management process, as outlined below.

SIX BASIC TYPES OF PERSONAL ORIENTATION

1.

Realistic orientation (Type R).

2.

Investigative orientation (Type I).

3.

Social orientation (Type S).

4.

Conventional orientation (Type C).

5.

Enterprising orientation (Type E).

6.

Artistic orientation (Type A).

Business owners can expect substantial improvement in the level of employee motivation and overall operational results within the organization as a direct result of an effectively implemented career management process.

Employee Career Management is discussed in detail in Tutorial 2.

23. LABOR-MANAGEMENT RELATIONS

LABOR-MANAGEMENT RELATIONS

Development of sound Labor-Management Relations represents another important managerial responsibility within any organization. Business owners, therefore, should be aware of essential elements of labor-management relations, which incorporate the principles of mutual acceptance and respect by management and employees, a free enterprise system, and free collective bargaining.

Labor-management relations may also be influenced by Labor Unions and other similar organizations, if applicable. Management, therefore, needs to be aware of labor union activities in their specific industry and be familiar with the standard unionization and collective bargaining procedures.

Business owners must be aware of several Types Of Labor-Management Relations, which have been designated by various federal laws as described below.

TYPES OF LABOR-MANAGEMENT RELATIONS

• Closed Shop.

In this instance only union members can be hired by a company. This provision was outlawed in 1947, however, it still remains in effect in certain industries in some states.

• Union Shop.

In this instance, employees are hired by a company but they must join the union within a prescribed period of time and pay union dues in order to remain on the job.

• Agency Shop.

In this instance, all company employees, including non-union members, must pay union dues. It is assumed here that the union's efforts benefit all employees.

• Open Shop.

In this instance, union membership decision rests with employees. Those employees who do not join the union are not liable for union dues.

• Maintenance Of Membership Arrangement.

In this instance, employees are not obliged to belong to a union. Those employees who are union members, however, must maintain their membership in the union during the employment period.

Labor-Management Relations are discussed in detail in Tutorial 2.

24. EMPLOYEE SAFETY AND HEALTH

EMPLOYEE SAFETY AND HEALTH

One of the most important managerial tasks requiring special attention relates to Employee Safety And Health.

Effective Safety And Health Procedures need to be developed and implemented to secure the welfare of employees, to meet appropriate legislation requirements, to minimize injury compensation costs, medical expenses, production losses, and legal costs.

Business owners and managers must familiarize themselves with various employee safety and health procedures prescribed by the Occupational Safety And Health Administration(OSHA). This information is available online.

SAFETY PROGRAMS AND EDUCATION

Moreover, management must develop an effective Safety Program for all employees within the organization and adopt appropriate Accident Prevention Policies. This entails examination of specific Safety Requirements which relate to the operational facility, plant, machinery and mechanical equipment, electrical installations, manufacturing or operational processes, safety equipment, and operators.

It is also necessary to initiate and maintain continuous Safety And Education of employees in the workplace. This may include safety instructions during the orientation of new employees and ongoing training sessions for existing employees, safety precautions during the on-the-job training, regular operational safety meetings, and display of posters describing safety procedures and rules.

Management must also be aware of various factors, which may cause accidents in the workplace, as described below.

TWO TYPES OF FACTORS WHICH MAY CAUSE ACCIDENTS IN THE WORKPLACE

• Technical Factors.

This may include improperly guarded equipment, defective equipment, hazardous materials, unsafe storage procedures, improper ventilation and illumination.

• Human Factors.

This may include failing to secure equipment, failing to wear proper safety clothing, operating plant and machinery in an unsafe manner, and distracting other employees.

Finally, business owners and managers must be familiar with specific Accident Reporting And Record-Keeping Procedures, based on prevailing OSHA guidelines.

Employee Safety And Health are discussed in detail in Tutorial 2.

25. EMPLOYEE CONFLICT MANAGEMENT AND SEPARATION

EMPLOYEE CONFLICT MANAGEMENT AND SEPARATION

Employee Conflict Management And Separation represents an essential element of the human resources management. This process must be conducted strictly in accordance with various Employment Laws, including The Workers Adjustment And Retraining Notification (WARN) Act.

Business owners and managers should be familiar with the following important elements of the employee conflict management outlined below.

TWO ELEMENTS OF EMPLOYEE CONFLICT MANAGEMENT

1.

Employee grievance procedures.

2.

Employee disciplinary procedures.

Furthermore, management should also be familiar with Employee Separation Procedures outlined below.

EMPLOYEE SEPARATION PROCEDURES

1.

Employee layoff procedures.

2.

Employee dismissal procedures.

3.

Employee retirement procedures.

Disciplinary Action Penalties Process, for example, entails the following five steps outlined below.

STEPS IN THE DISCIPLINARY ACTION PENALTIES PROCESS

1.

Verbal warning.

2.

Written warning.

3.

Disciplinary suspension.

4.

Demotion.

5.

Discharge.

Employee Conflict Management And Separation are discussed in detail in Tutorial 2.

26. WHO IS RESPONSIBLE FOR HUMAN RESOURCES MANAGEMENT?

HUMAN RESOURCES MANAGEMENT

Management in every organization has to ensure adequate performance of the above mentioned functions to secure continued organizational success. Depending upon the company size, these functions should be performed either by the company's president, or, if the company's budget allows, by a specially appointed Human Resources Manager or Vice President, Human Resources. 

Small and medium-sized companies usually do not find sufficient justification to employ a human resources manager and, instead, allocate the human resources management function to the company’s President or to a senior manager within company.

Ultimately, it does not matter which manager will be in charge - the most important thing is that the human resources management function must be carried out in your organization!

27. FOR SERIOUS BUSINESS OWNERS ONLY

ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY?

Reprinted with permission.

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LESSON FOR TODAY:
Running A Business Is 95% People And 5% Economics!
Joe Griffith