Business Management Series #42

Mike Holt Enterprises Understanding the NEC

This newsletter series will give you insights and techniques to help you build a better business no matter how large or small yours is. I always say that success comes from working on your business as opposed to in your business. I want to share with you the systems and philosophies that have been successful for me over the years.

This is newsletter #42 in the series. If you have missed prior newsletters, and are enjoying the series, we encourage you to purchase the program. More information can be found by clicking on the coupon at the bottom of this page.

Hiring and Firing

Essentially, there are four main situations that are indicators that you need to hire an employee or additional employees:

When you don’t have the skills and expertise to do a job
When it will cost you more to do the job yourself than to hire someone else to do it
When one person can’t do the job
When you hate doing a task that must be done

You must then determine if the person will be needed to work on a full-time or part-time basi,s as an employee, or as an independent contractor. A written job description provides a clear representation of the skills and abilities required to effectively complete the job you need done. Before you begin the interview process, it’s best to have that job description designed, as well as a basic compensation package developed for the prospective hire.

Make sure that you are familiar with the Labor and Employment laws, both at the federal level and in your state as they relate to wages, benefits, probation, termination, etc. The following are solid guide-lines for hiring new employees, but Labor Law prevails.

Finding the right people for your organization is usually a matter of looking carefully at past experience and present capabilities. Getting referrals from a previous employer or acquaintance is probably the best way. When that isn’t possible, get and check references, look at samples of past work or track record, or provide a pre-employment test to determine actual skill level. Don’t be surprised when previous employers will do little more than confirm employment dates. They may be doing so only as a matter of company policy to reduce the potential for lawsuits. What is your policy about providing referrals? You do have one, don’t you?

During the interview process, raise the problems and concerns you have in relation to the work you are hiring for. If you are under a tight deadline or the workday is pressure filled, be clear about your requirements for the job to be done right, and on time. Explain any special circumstances that the individual may be involved in, such as regular overtime, weekend work, fieldwork, driving to and from jobsites, etc. Then listen and watch the person respond. Do they appear to have solutions? Are they confident about handling the situations you present?

The success of your organization is largely based on the work performance of the employees you hire. Why hire someone you may eventually fire? What a waste of your time in interviewing, training, trying to solve their problems and making them adapt to company policies if you’re not convinced from the beginning that this is the kind of employee you want in order to build a successful organization. When making a hire, make sure they understand the kind of performance you expect from them. Feel confident and be sure to check their references.

Establish a company policy that new employees are to be evaluated over a probation period before regular employment is offered. Print this policy on an application form and explain it to the applicant so that no doubt exists. Have a written contract outlining mutual responsibilities and obligations.

If a valued employee wants to terminate on his/her own volition, find out why. Should your efforts to keep them be unsuccessful, leave the door open for them to return at a later date under amicable conditions. Phone them after a period of several months to tell them how much their work was appreciated, and invite them to return. They may have decided they were better off with you as an employer, but were reluctant to make the first call.

There will be a time when you find that the attitude or production of an employee is below your acceptable standards. Have the employee in for an interview held in confidentiality and privacy (it’s a good idea to have a quiet observer to these interviews), giving enough time and limiting outside interruptions. Tell them what you like about them and specify where their performance is satisfactory. Try to find out the source of their problem and offer your help. Opening the lines of communication may uncover a situation or personal or work problems that can be resolved.

If there is no alternative to firing, do so without animosity. If there is a temporary problem that can be worked out, decide whether the employee is valuable enough for you to exercise patience. If you keep an employee, follow up with periodic checkups. Don’t retain an employee who is unwilling to compromise or who sets a poor example for other employees within the organization. A firing is an admission by both parties that one or the other, or both, failed to prevent the termination.

POINTS TO CONSIDER WHEN HIRING:

Consider employees’ potential for upgrade to positions of greater performance.
Realistically consider the high cost of turnover in personnel.
Develop a list of questions for applicants that provide the information you need to make a qualified employment decision.
Determine the actual reason why an applicant left a former position.
Check on references and verify past experience listed.
Identify his/her short-range and long-range personal and professional objectives.

POINTS TO CONSIDER WHEN FIRING:

Conduct corrective interviews.
Determine if there is an ability problem or an attitude problem.
Have a personal interview and prepare a written report signed by either management or the supervisor, and the employee. Date the report and maintain a copy in the personnel folder.
Correct poor communication.
You have a right to know what your employees are doing.
Employees have a right to know what the consequences of their actions are.

Remember that ability problems can be solved. Attitude problems are more difficult to deal with.

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For more information on this topic, get a copy of Mike Holt's Business Management Skills textbook or Ultimate Business and Success video library.

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