Creating a company culture that promotes excellence and commitment is a critical requirement for startups. However, the term “Human Resources,” or “Human Resources Management,” frequently conjures up negative stereotypes and can be viewed as a necessary evil. In spite of its occasional bad reputation, in cases where “HR” is part of an overall vision for a company’s success, it can be at the heart of promoting growth, profitability and longevity. I believe the topic of creating effective management practices and excellence (of “HR” for short) deserves in-depth consideration and discussion. In my opinion, Human Resources should be viewed as an opportunity for a company to maximize its goals of productivity, success, employee loyalty and stability — all of which lie at the center of the culture of the organization. Numerous experts have recently discussed how the most powerful women in business achieve excellence. This has been led by Sheryl Sandberg’s book “Lean In.” While many emphasize the intelligence, skills and networking abilities of these leaders, it goes further. In general these women shared a common quality — that of seeking out and taking advantage of opportunities and encouraging people in exciting environments rather than the approach adopted by managers in many traditional companies. This raises an important question about how to create effective Management practices and excellence throughout your company. In other words… how can you stimulate excellence?
Essential Elements of Effective Management Practices
- Effective Management Practices are like many things in life and business — they don’t happen by accident. This is especially true for managers of startup companies where employee motivation and productivity are so highly-critical. Understanding the expertise of every member of a company is critical to a startup’s success.
There is a saying that rings true in this regard: “If it’s not your Genius… it’s not your Job.” Virtually every success story in startups involves having great people in key positions. In contrast, every failure usually involves poor performance. My own advice is that you can’t reward great people too much and by the same token, you need to avoid having mediocre or poor performers involved, even those who are outside resources. Just think of it — you generally don’t want to sell the cheapest product. Well, don’t hire the cheapest staff. An example from Google illustrates the importance of taking care of good people. Google was having a significant problem with highly qualified young women leaving at very high rates. After careful research, they found Google did not have competitive maternity benefits all over the U.S. They changed the plan so new mothers would now get five months off at full pay and full benefits, and they were allowed to split up that time however they wished. The change more than solved the problem, except for Melissa Myers who left Google to become President of Yahoo. However, she got maternity leave in the first few weeks of joining Yahoo, and instituted a similar policy as Google at Yahoo.[pullquote]Rewarding excellence, demonstrating respect, and being flexible are key elements of effective management practices which lead to excellence. [/pullquote] Following are some of the other lessons I have learned and observed:
- Empowering employees both encourages satisfied customers and motivates employees with the confidence that they can experience success.
- Respecting and helping staff goes a long way. Assistance in the form of best practices, information guide books, incentives, and resources like time, efficient computers and programming can all increase the respect for your organization. Simple gestures such as “Thank you”, “Please” and cordial get-togethers can help create the culture you want.
- Excellent people are by nature frequently unconventional, and they can require a culture that encourages their unique-ness, energy, determination, and focus. While such creative and productive people can be true assets to your company, they can also tend to be more independent, arrogant and self-centered. A quality HR program anticipates such individuals and has a plan in place to incorporate them as well as others.
- I believe that we make more errors in constraining excellent people than we do in encouraging them. The reason is quite simple. Everyone is aware of the costs and failures of special programs that do not succeed. Remember, Xerox virtually gave away the initial programming for Windows to Microsoft. What we are not often aware of are the losses never realized by not pursuing new and exciting strategies. Remember, Steve Jobs got fired from Apple for justifiable reasons but the company suffered for years until he returned.
Knowing the individual “genius” of each member of your team will help insure that that their true gifts are being intelligently deployed and not squandered. It’s a true “win-win” when this happens.
How to Manage and Motivate Outside Experts
Management excellence does not just involve internal staff and management. There are many reasons to consider engaging outside experts and managing them productively as well as you manages in-house staff. Seeking expertise outside your company can be an important element for success, and a good management team knows when — and when not — to seek such external help. Even the best and most experienced managers cannot be an expert at everything and will often need to seek excellence in areas unfamiliar to them. In particular technical people frequently need creative support and creative people need technical support. Professional areas such as legal, accounting and insurance also represent areas where outside specialized services make sense. Such outside experts need to be considered in terms of their needs for your empowerment, encouragement and flexibility in the same manner you would extend such considerations to your own staff. Another reason to seek outside assistance is that — as a manager, you simply don’t have time to “do it all.” Starting a business requires intense time and energy, and a multitude of tasks all requiring priority and attention. Sharing such tasks with outside experts — even if only for a limited time — can make the process of launching and growing your company simpler and faster, especially if these experts are managed and respected for the benefits and value they bring. Use of outside experts, and effectively managing them, can be more efficient since you need to value your and other staff’s time. Can such resources be obtained at lower costs? Accessing and motivating outside professionals is particularly relevant since in today’s economy. There are many highly-educated and skilled professionals who are either unemployed or underemployed. It is frequently possible to hire these people for short term assignments at a lower than market rate, and if they prove promising, this might lead to longer-term assignments if not full-time employment with your company. Hopefully one of the critical issues facing your organization will be staffing for growth. Using outside resources is a quick way to provide resources and flexibility for the spurts from growth. There are also a variety of ways to retain outside services:
- Contract out an entire project like website development or developing legal contracts
- Hire part time experts on an hourly or fee basis, and
- Hire full or part time employees
Which method is best depends on the level of expertise, budget, priority of the need, startup versus operating requirements, etc. Whatever method is chosen, the establishment of clear goals, requirements, and expectations both improve the prospects for superior performance and minimize potential problems. Such standards and expectations should be written up in advance so both you and your outside resource has a clear and common understanding. For example you need a clear understanding of the structure and latitude of the assignment. There are also several operational considerations in hiring outside employees:
Whether you are planning to hire in-house staff or outside experts, plan your recruitment efforts thoroughly in concert with your fellow managers. Prepare a job description, including job title, reporting relationships, primary function, main duties/expected results, and job requirements (skills, knowledge and training required). Establish your desired compensation range for the new position. Select recruitment sources most likely to achieve results for the particular search. Recruitment sources may include:
- Existing employees
- Employee referrals
- Personal contacts
- Educational institutions
- The internet
- Employment agencies (public, private, and temporary)
- Professional associations
- Media advertising, and
- Local community organizations (such as the Chamber of Commerce)
Interviewing and Selection
Employment interviews need to focus on hiring the best people with the appropriate skills and experience. There is sometimes a trade-off that one must consider between the person with the best skills for the current job and the best fit with the company. Such considerations require skill and experience, especially in the early stages of a company’s growth, since unfortunately a new company lacks substantial history to predict the success of its future staff or consultants.
Rules of Engagement for Recruitment and Interviewing
Hiring and managing new members of your staff or advisory board is filled with unknowns. It is in your best interest to be sure that you are aware of both the pitfalls and benefits of the process. Here are a few tips:
- Prepare a set of behavior-based interview questions that are asked of all candidates
- Ask only job-related questions during the interview. Avoid questions regarding a person’s age, race, sex, marital status, national origin, or disability status
- You also need to ensure that everyone understands the parameters of the job including start date, benefits, hours, pay, status and employment requirements like references, resume validation, driving record and credit record as appropriate.
Once a hiring decision has been made, you need to meet certain administrative requirements include:
- Completing and submitting employee information , documentation and tax forms
- Explaining corporate policies concerning issues like safety, harassment, civil rights, termination, and company property definitions and policies.
- They also need a clear understanding of corporate polices including confidentiality, return of property and termination polices
- You and the new employee need a clear understanding of Exempt versus non-exempt status, polices and laws
- Reviewing optional benefits such as vacation, sick days, holidays, etc. and the polices with regards to allowing them
- Mandated benefits. Social Security (FICA)( shared cost), Workers Compensation ( employer paid), Unemployment Insurance ( shared cost), State Disability ( employee paid. All of these require reporting and compliance with state and Federal requirements)
In summary, maximizing human resource performance is both a critical component of sound management and an opportunity for success. Seeking sound advice about how to structure your HR program in advance is not only advisable, but it can help ensure “smooth sailing” as you encounter the inevitable experiences of recruitment, hiring, incentives, discipline and even termination. Just don’t let the organizational requirements infringe on the need for excellence and results.