Most large corporations have sets of manuals with many volumes and entire departments devoted to nothing but human resources and personnel. But since you aren't General Motors, you need a much more "user friendly" personnel program. You should start with a concise handbook that spells out the policies and procedures you use for hiring, performance standards, setting objectives, annual job reviews, salary and wage considerations and problem situations. You will also want to include in this handbook information on your benefits package.
If you are one of those small business owners who has never quite gotten around to writing a personnel handbook, start out by writing out job descriptions for each of the jobs in your business. Include the duties of the job, skill and education requirements and salary information. Not only will this help you establish some uniformity, but it also will enable you to evaluate how well your existing employees fit into their current jobs. I also recommend inviting the employees to participate in the creation of the job descriptions.
Once you have job descriptions written out, you need to set specific goals for your employees. These can range from sales goals to more intangible but equally important goals like providing friendly customer service or working well with co-workers. All goals need to be measurable and should be agreed upon by the employee. These goals should be used to evaluate the employee's performance each year when it comes time for a job and/or salary review.
One of the benefits you will reap from setting specific goals for your employees is that they will generally feel empowered to take more ownership in their job function in your business. It will also let them know exactly what you expect out of them on an ongoing basis.
On an at least annual basis, you should conduct a formal performance appraisal on each employee. In addition to assessing the employee's success in meeting his/her goals, the performance review offers the opportunity to evaluate the employee in several key areas:
- Job knowledge
- Judgment Interpersonal skills — both in dealing with customers and co-workers
- Attendance and punctuality
The annual performance review also offers the opportunity to document any problems that you are experiencing with the employee. However, you really shouldn't wait for an annual review to cover either the positives or the negatives. An integral part of any effective personnel program is the informal feedback that occurs on an ongoing basis. If an employee deserves a pat on the back for a job well done, give it to him. Likewise, if you aren't pleased with a certain aspect of an employee's performance, let him know that, too.
Your good employees want to know where they stand in their job performance on an ongoing basis. You should keep the job performance lines of communication open throughout the year so that there are never any surprises in the formal job review.
How to fire an employee
Firing an employee is one of the toughest situations you face as an equipment rental business owner. Regardless of the reason, it is never easy. Before you carry out the task of firing an employee, you should first explore the alternatives. If the problems have recently surfaced, the employee might be going through a tough time personally that he just needs to work through; or he might be unsure of exactly what is expected of him.
An alternative to firing the employee in this case would be to meet with him and discuss your concerns from a job performance standpoint and ask him for an explanation. Then, put the employee on a 60- or 90-day probation with some specific goals agreed upon by both of you to fix the problem. Proper documentation of unacceptable performance will help you avoid time consuming lawsuits, and ensure consistency and fairness in your human resources policies.
Another alternative to termination is a job change. Burnout can sometimes cause employee performance to suffer. In these cases, a change in responsibilities can often get the employee back on track.
Of course, there are some cases in which you have already tried a form of probation and termination is the correct action to take to alleviate an employee problem. Let's consider some suggested procedures to follow in dealing with the difficult situation of firing an employee.