Chapter 19

Copyright 2011 by the McGraw-Hill Companies, I nc. All rights reserved. McGraw-Hill/I rwin
Human Resource
Management
Small Business Considerations
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
19-8
Figure 19.1
Federal Employment and Labor Laws
Applicable to Growing Businesses
19-9
Table 19.1
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 rsum 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 rsums 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
Internet recruiting
Employee referral
Company
websites
Career service
offices
Professional groups
Outsourcing
Local churches
and pastors
Local high school
for entry-level jobs
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
19-19
Figure 19.3
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
19-24
Table 19.3
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 firms
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
19-27
Teamwork
Recognition
Training
Empowerment
Contribution
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