Developing a Personnel System

Assessing Personnel Needs

The small business owner should base the firm's personnel policies on explicit, well-proven principles. Small businesses that follow these principles have higher performance and growth rates than those that do not follow them. The most important of these principles are

All positions should be filled with people who are both willing and able to do the job.

The more accurate and realistic the specifications of and skill requirements for each job, the more likely it is that workers will be matched to the right job and, therefore, be more competent in that job.

A written job description and definition are the keys to communicating job expectations to people. Do the best job you can! is terrible job guidance.

Employees chosen on the basis of the best person available are more effective than those chosen on the basis of friendship or expediency.

If specific job expectations are clearly spelled out, and if performance appraisals are based on these expectations, performance is higher. Also, employee training results in higher performance if it is based on measurable learning objectives.

The first step in assessing personnel needs for the small business is to conduct an audit of future personnel needs. Ask yourself

Can the workload you visualize be accomplished by the present work force? Will more or fewer employees be needed? Consider seasonal patterns of demand and probable turnover rates.

Can any jobs be eliminated to free people for other work?

What balance of full-time or part-time, temporary or permanent, hourly or salaried personnel do you need?

What does the labor supply look like in the future?

Will you be able to fill some of the jobs you've identified? How easily?

What qualifications are needed in your personnel?

Develop a method to forecast labor demand based on your answers to these questions. Once your needs are estimated, determine strategies to meet them.

The process of selecting a competent person for each position is best accomplished through a systematic definition of the requirements for each job, including the skills, knowledge and other qualifications that employees must possess to perform each task. To guarantee that personnel needs are adequately specified, (1) conduct a job analysis, (2) develop a written job description and (3) prepare a job specification.

Job Analysis

Job analysis is a systematic investigation that collects all information pertinent to each task performed by an employee. From this analysis, you identify the skills, knowledge and abilities required of that employee, and determine the duties, responsibilities and requirements of each job. Job analysis should provide information such as

Job title.

Department.

Supervision required.

Job description-major and implied duties and responsibilities.

Unique characteristics of the job including location and physical setting.

Types of material used.

Types of equipment used.

Qualifications.

Experience requirements.

Education requirements.

Mental and physical requirements.

Manual dexterity required.

Working conditions (inside, outside, hot, cold, dry, wet, noisy, dirty, etc.).

Job Description

The job analysis is used to generate a job description, which defines the duties of each task, and other responsibilities of the position. The description covers the various task requirements, such as mental or physical activities; working conditions and job hazards. The approximate percentage of time the employee should spend on each activity is also specified. Job descriptions focus on the what, why, where and how of the job.

There is an excellent resource the small business owner can use to develop job descriptions, ask employees themselves to describe their jobs. A good employee may know more about the job than anyone else.

Job Specification

The job specification describes the person expected to fill a job. It details the knowledge (both educational and experiential), qualities, skills and abilities needed to perform the job satisfactorily. The job specification provides a standard against which to measure how well an applicant matches a job opening and should be used as the basis for recruiting.

Recruiting

As a small business owner-manager, you should be aware of the legal environment in which you operate. This is especially true when it comes to recruitment. Being aware of legislation that will affect your business is extremely important to efficient recruiting.

Sources of Employees

Effective recruiting requires that you know where and how to obtain qualified applicants. It is difficult to generalize about the best source for each business, but a description of the major sources follows.

Present employees - Promotion from within tends to keep employee morale high. Whenever possible, current employees should be given first consideration for any job openings. This practice signals your support of current employees.

Unsolicited applicants - Small businesses receive many unsolicited applications from qualified and unqualified individuals. The former should be kept on file for future reference. Good business practice suggests that all applicants be treated courteously whether or not they are offered jobs.

Schools - High schools, trade schools, vocational schools, colleges and universities are sources for certain types of employees, especially if prior work experience is not a major factor in the job specification. Schools also are excellent sources for part-time employees.

Private employment agencies - These firms provide a service for employers and applicants by matching people to jobs in exchange for a fee. Some fees are paid by the applicants, and there is no cost to the employer; for highly qualified applicants in short supply, the employer sometimes pays the fee.

Employee referrals - References by current employees may provide excellent prospects for the business. Evidence suggests that current employees hesitate to recommend applicants with below average ability. Word of mouth is one of the most commonly used recruiting sources in the small business community.

"Help Wanted" advertising - Letting people know that the business is hiring is a key element in gaining access to the pool of potential employees. At its simplest, this type of advertising may take the form of a Help Wanted sign in the window. More sophisticated methods involve using local media, the internet, primarily print sources such as daily and weekly newspapers. The classified pages of newspapers are frequently consulted by active job seekers, including currently employed individuals who may be tempted by a more attractive position. Other advertising media include radio and television. These tend to have a wider appeal than the newspaper; however, the price of an advertisement is correspondingly higher.

Evaluate your financial plan occasionally with actual operations figures. With powerful records you can accomplish this.
Afterward, where discrepancies appear it is possible to take corrective action before it is too late. The proper decisions for the
right corrective action depends upon your own knowledge of management techniques in buying, pricing, selling, selecting and
training personnel, and tackling other management problems.

You probably are thinking you can hire a bookkeeper or a Accountant to deal with the record keeping for you. Yes, you can. But
remember two very important facts:

1. Supply the accountant with accurate input. If you buy something And do not record the amount in your business checkbook, the
accountant can not enter it. If you sell something for money and don't record it, then the accountant won't know about it. The
documents the accountant prepares will probably be no better than the info you provide.

2. Utilize the records to make decisions. If you went to a doctor And he told you you were ill and needed certain medicine to get
well, you would follow his guidance. If you pay an accountant and he informs you that your sales are down this year, don't hide
your head in the sand and pretend the issue will go off. It won't.

Business Management Roll in Personnel Selection. If your Small Business Will be big enough to require external assistance, an
important duty will be the selection and coaching of one or more workers. You may start out with relatives or business partners to
assist you. But if the business grows - as you expect it will - the time will come when you have to select and train personnel.

Careful choice of employees is essential. To Pick the right Employees determine beforehand what you need each one to perform.

Then look for applicants to fulfill these specific needs. In a small Business you may need flexible employees who can shift from
task to task as needed. Include this in the description of the tasks you wish to fill. At the same time, look ahead and plan your
hiring to guarantee an organization of individuals capable of performing every essential function. In a retail store, a
salesperson might also do stock-keeping or accounting at the start, but as the company grows you will need sales people,
stock-keepers and bookkeepers.

When the project descriptions are composed, line up applicants whom To make a selection. Do not be swayed by clients who might
suggest relatives. In the event the applicant doesn't succeed, you might drop a client in addition to a worker. Some sources of
potential new employees are:

1. Tips by friends, business acquaintances. 2. Employment agencies. 3. Placement bureaus of high schools, business schools, and
colleges. 4. Trade and industrial institutions. 5. Help-wanted ads in neighborhood newspapers.

Your next task is to screen want ad responses and/or program Forms delivered by employment agencies. Some applicants will be
removed sight unseen. For each of the other people, the application form or letter will serve as a foundation for the interview
that ought to be conducted privately. Put the applicant at ease by describing your business generally and the job in particular.
Once you have completed this, invite the applicant to speak. Picking the right person is very important. Consult your questions
carefully to find out everything about the applicant that's pertinent to this job.

References are a must, and should be assessed before making a final decision. Check through a personal visit or a phone call
directly to the applicant's immediate former supervisor, if possible. Verify that the information given you is accurate. Consider,
with conclusion, any negative remarks you hear and what is not said.

Checking references can bring to light important Details Which may help save you money and future annoyance.

Personnel Training. A well-selected employee is only a possible Asset to your organization. Whether he or she becomes a true asset
is dependent on your own training. Remember:

To allow sufficient time for instruction. Not to expect too much from The trainee in too short a time. To let the worker learn by
doing under real working conditions, together with close supervision. To follow along with your training.

Check the worker's operation after he or she was at work For a moment. Re-explain key points and short cuts; bring the employee
current on new developments and encourage questions. Training is a continuous process which becomes constructive supervision.

Personnel Supervision. Supervision is the next crucial of employees control. Fantastic supervision will reduce the expense of
operating your company by cutting down on the number of worker errors. When mistakes are corrected early, employees will find more
satisfaction out of their jobs and perform better.

Motivating Employees. Small businesses sometimes face special Issues in motivating employees. In a large business, a Fantastic
employee can see An chance to advance into management. In a small business, You're the management. 1 thing you may wish to Think
about would be to give great workers a Small share of their proceeds, either via part-ownership or a profit-sharing plan. Someone
who has a"share of the activity" is going to be more Worried about helping to make a success of the business enterprise.

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