7 Key HR Practices That Every Small Organization Must Follow

Many employers managing small business setups possess excellent product knowledge but lack expertise in hiring and managing employees. Without a proper human resource management system, even the strongest business model can fail.

Taking this opportunity, I have discussed the 7 best HR practices that every small-scale business owners and employers must implement to build a reliable workforce and boost collaborative efforts in driving growth.

1. Hire the Right Candidate

Recruiting the right talent is crucial as a bad hire can cost your organization valuable time and resources. According to US Department of Labor, amount of loss of money for bad hire is 30% of employee’s first year salary. Moreover, CareerBuilder has surveyed 74% of companies have agreed to hire wrong person for a required position costing them to lose $14,900. Attract right candidates by creating a clear job description including the scope of work, essential qualifications, and desired expertise.

Companies must ensure proper candidate screening by developing perfect hiring strategies that includes efficient questioning tactics, and assessing personality, problem solving skills and integrity.

2. Provide Training to Encourage Learning and Development

Investing in your employees by providing training and creating a conducive environment for learning and development can increase employee engagement, loyalty and retention. If you want your business to stay ahead in this competitive market, you need to keep your employees’ knowledge and skills up to the mark. Create proper skill and HR training modules to educate employees that will help in meeting organizational goals.

Various employee-centric training programs can help organizations increase productivity up to 17% and experience a higher sales and profit.

3. Stay Organized and Set Goals for a Better Organizational Development

Every successful business emphasizes on professional goal setting for a better organizational growth and success. If your organization falls under small size or medium size company, the success relies on the employee performance. Studies show that workgroups who set goals achieved 20-25% better performance.

Managers and leaders must stay organized, plan and prioritize tasks, clearly define objectives, identify talent for the role, discuss an actionable plan, assign work and follow up on the progress.

4. Develop a Great Work Culture

A healthy work culture motivates employees to be more productive and promotes happiness. According to a Deloitte report, “94% of executives and 88% of employees believe a distinct workplace culture is important to business success.”

A company culture depicts the organization’s morals and values. Ensure complete transparency in developing a professional environment and align it with organizational mission, vision, beliefs and goals. A strong work culture is crucial for increasing employee satisfaction and retention.

5. Focus on Team Building Activities

Team building plays an important role in motivating the workforce for a better collaboration and performance. Small businesses with excellent people management skills should prioritize team building exercises.

Best team building practices include various productive as well as fun-filled activities. Here are few activities that can be conducted:

  • Hosting a dinner for employees will help employee build rapport with each other and get along.
  • Taking your team to a conference or industry expo is also another great idea to get your employees together along with gaining new skills and knowledge.
  • Involve your team in volunteering activities. You can contact any local volunteer organization and non-profit for planning and conducting such activities.

With these exercises, employers get to learn about individual capacities, promote engagement, and build trust.

6. Evaluate Performance and Give Constructive Feedback

Tracking employee performance and sharing frequent performance feedback is vital. This helps employees assess their own performance and identify possible areas for improvement.

The way of presenting feedback to employee is also important. If employee is delivered criticism and disapprobation for his work, the employee might feel belittle and demotivated. The feedback must be presented in a positive way highlighting a good work done along with the areas where there is a need of improvement. This will motivate employee to do work better.

As part of an effective employee performance management system, workplaces should assign performance metrics to job roles and evaluate individual contribution based on KPIs to share constructive feedback.

7. Provide Compensation and Benefits

A company providing enticing employee perks and benefits are more applauded and known for it. Providing attractive compensation and benefits would help to retain best performing employees and attract other highly skilled professionals to join the team.

Depending on the company policy, you could decide the right package, allowances, incentives, health insurance, retirement plans, paid vacations and other benefits. You may choose the most appropriate plan that falls under the company budget.

I hope that by implementing these HR tips, small businesses can focus more on building a productive, engaged and reliable workforce and achieve organizational goals. Does your organization any other HR strategies? Share your experience in the comments.