Michael Best considers how an effective employee management strategy could save you time and money

Employees are idiosyncratic creatures, and when we pour all those idiosyncrasies into a small business, like ingredients into a blender, most of the time we cross our fingers and hope for the best. Well, therein lies the average small business owner’s problem. It requires more than luck to select the right ingredients and blend them the right way to produce a palatable mixture — it requires skill. Many owners gamble with this important aspect of their businesses by settling for seat-of-the-pants employee management rather than acquiring the skills or help to properly hire, train, manage and fire. Successful employee management is a critical aspect of managing for success. It therefore only makes sense that your employee-management strategy should be carefully formulated and executed.

What kind of employer do you want to be?

Ideally, before hiring your first employee, you should establish what kind of employer you want to be. It didn’t occur to me to do this and instead, like many small business owners, I drifted into my employer role without much planning or forethought. Consequently, I made mistakes. Huge mistakes. One way to determine the kind of employer you want to be is to determine the kind of employer you don’t want to be. For instance, you might not want to lose your temper as a customer of mine routinely did. On one occasion, after the third costly error in his textile screen printing shop in the space of a couple of weeks, he made a general announcement to about 20 employees. In an expletive-ridden tirade, he claimed that he was losing money because of their shoddy workmanship. He then added that he’d lose less money if they all stayed home and he mailed them their cheques every two weeks. I was there to witness the employees cringing under the verbal onslaught. It was very unpleasant.

Someone once reminded me that every employee is somebody’s doting lover, the apple of a mother’s eye or the hero of a little child. His words struck a chord. These are the threads woven into the fabric of a person’s self-esteem and dignity and, as the employer, you have no right to tear that fabric. There are ways of handling reprimands and other inevitable employee-related problems without humiliating people or undermining their self-esteem and dignity.

Leaping out of bed

I’d always hoped to create a business that would have employees leaping out of bed every morning hardly able to conceal their excitement at the prospect of another day at work. Naive? Perhaps. For most small business owners, a more realistic goal would probably be to have employees who are not reluctant to get out of bed at the prospect of another day at work. Nobody should be reluctant to get out of bed and go to work for fear of verbal abuse, embarrassment in the presence of colleagues, sexual harassment, shoddy or dirty surroundings, or any number of other bad situations found in some workplaces. Alarmingly, it seems to escape some small business owners’ understanding that it’s not just about basic human decency – an abused, unhappy workforce is also unproductive.

The budget is not an excuse

Small businesses are quite often constrained in what they can do for their employees, particularly in the early days when budgets tend to be tight. However, the budget is no excuse for below-par working conditions. Tidiness and cleanliness, primarily, require commitment and effort, not a big budget. Create a happy environment for employees – it’s not only the decent thing to do, but it also contributes to higher productivity. Small business owners should also be mindful of the fact that if employees are expected to do a good job, they must be given the tools with which to do it. This might sound obvious, but I’ve heard many small business employees complain about old computers, outdated software and broken or poorly maintained equipment. What their bosses might not realise is that what they think they’re saving by being thrifty, they might be more than losing in poor productivity.

Non-monetary and low-cost benefits

Certain non-monetary and low-cost benefits can mean a lot to a small business employee and make the difference between just another place to work and a great place to work. We used a number of them. For instance, birthdays were a paid day-off in my business, and not only did the employees appreciate it, but they also told me how impressed their friends were, which of course made them feel good about where they worked. These gestures garner so much goodwill for such a low cost that I can’t understand why more small businesses don’t offer them. I accommodated preferred vacation dates even though most of them were in the summer months during our busiest season. Upsetting an employee’s entire family by messing with their vacation plans will do nothing for morale in the long term.

Expert hiring assistance

It’s a conversation conducted between small business owners probably thousands of times daily all over the world – the one about how difficult it is to hire the right people. I had such a conversation over dinner at a trade show with the owner of an engineering firm who enjoyed a fiercely loyal and long-serving group of employees. He explained that his secret was a consultant with many years of experience using sophisticated employee-assessment tools to help companies acquire and deploy talent. Let’s call him Dr Gordon. He said that for a number of years Dr Gordon had been assisting with his business’s hiring process and that the result was a spectacular drop in employee turnover. We arranged a telephone introduction and from that moment, our hiring results improved dramatically. In addition to matching the character traits of prospective hires to the job description, Dr Gordon helped me select employees best suited to the personalities of the principals and other employees – an important consideration in a small business. I’ve often wondered how many bad and costly hiring decisions are made daily in the small business community – decisions that a consulting fee of a few hundred pounds could remedy.

Employees do the strangest things

For the most part, I believe that small business employees take their jobs seriously. Most mean well. However, they are human. And regardless of how well you hire, create as close to an ideal work environment as possible and manage your employees according to the best advice available, things will go off the rails from time to time. There can be any number of reasons for out-of-character behaviour, but lapses in judgement seem to have been at the root of most of the strange things a few of my employees did and said. When you experience moments like these with your employees (notice when, not if), you’ll find yourself wondering if this is normal. Don’t sweat it – it’s normal and all part and parcel of being a small-business owner. These things are bound to happen – what matters is how they’re handled. I can only suggest patience, tact and good judgement.

Familiarity breeds contempt

The relaxed atmosphere characteristic of most small businesses should not be construed as an invitation to anything other than a cordial but professional employer-employee relationship based on mutual respect. It’s a business relationship that amounts to nothing more than money changing hands for time and expertise rendered – to view it any other way is to court trouble. If that sounds a bit cold, consider for a moment how awkward routine employee-management activities such as performance reviews, salary negotiations, promotions, demotions and terminations might be if the employer has a personal relationship with the employee. The employees’ private lives are none of the employer’s business. Conversations not related to work should be polite,
brief and superficial. Intimate topics such as relationships, finances and relatives have no place in the employer-employee relationship. Sentiment should not enter into the equation. And I shouldn’t need to mention this: sleeping with employees is bad business practice. It’s a sure way to discover the wisdom in the old adage about familiarity breeding contempt – a slow-acting but deadly poison in a business relationship.

It’s just business

In the small business community we are sometimes inclined to think of our friendly employer-employee relationships as sustainable, but don’t be disappointed if you never again hear from a former employee. It might happen occasionally, but it’s not common. A departing employee’s “I’ll stay in touch” means about as much as a shop assistant’s mechanical “Have a nice day”. A small business employer– employee relationship might be intellectually stimulating, intriguing, pleasant, personable and productive – but, in the end, it’s still just a business arrangement..


This is an edited excerpt from Characters Who Can Make Or Break Your Small Business by Michael Best. Through 39 characters, Michael covers all aspects most small business owners can expect to encounter in the life of a business from inception to disposition. It can be read linearly or used a reference book to be consulted when confronted with a particular issue. Real life examples and anecdotes presented conversationally means it’s not your average, boring business book. It is available from: