Make the Most of Employee Relationships

September 04, 2018

Although businesses must have products and services to sell, debt or equity financing, equipment and other fixed assets, a business’ greatest assets are its employees. They are the bridge between customers and the business. The knowledge, skills, and attitudes employees bring to a business will be a deciding factor in the level of customer satisfaction. Whether a customer repeats the buying experience will largely depend on employees’ performances. A business’ ability to thrive, succeed, and create its own competitive edge rests with the people it hires, as well as the quality and uniqueness of its products and services. Without great employees, however, business remains at a standstill.

While the importance of human capital should always rate high on the list of a business’ valuable resources, these crucial assets are often neglected during good and bad economic cycles. When slowdowns occur, one of the first areas to suffer is often human resources – employees, salaries, benefits, and individual concerns. It is precisely during these slumps when businesses need to capitalize on the potential of each employee to increase productivity and efficiency. 

Employee relations in small businesses and SMEs usually have an environment that is less formal and more flexible than normally found in larger organizaitons. This environment encourages more direct interaction between the employer (owner and managers) and employees, which makes decision-making and communication more streamlined. This informal environment can also lead to practices that can have a negative effect on productivity and motivation; therefore, it is prudent to enhance employee relations as much as possible. 

The following initiatives can enhance employee relationships: 

Establish expectations — Initially setting expectations provides a starting point for both employers and employees. For the owner or manager, it is an opportunity to discuss and explain the business’ products, services, goals, procedures, and rules in addtion to the employee’s specific duties and responsibilities. For the employee, it is an opportunity to clearly understand the details and expectations of the job. This two-way communication avoids misunderstandings and establishes a positive employer-employee relationship. The levelling of expectations allows both parties to understand and gain insights from the perspective of the other. It is a proactive measure to avoid confusion and builds mutual trust and understanding from the beginning of employment. This can be the first step in establishing a positive relationship between the parties. 

An important concept is to be fair and consistent when implementing policies to make sure that all employees are treated the same. Due to the familiarity among owners/managers and employees in many small businesses, problems can arise when rules and procedures are not applied and enforced equally with all employees. When employees see inconsistencies with management, it causes confusion and dissension among employees resulting in overall demoralization.

Provide feedback — Feedback is vital for employees to grow professionally. Constructive feedback allows employees to build upon strengths and work on weaknesses, thus, encouraging and increasing productivity. It is ideal to use both formal and informal feedback when evaluating an employee’s performance. Objectivity and fairness are critical for feedback to work as intended. 

Create growth opportunities —  Even in a small business or SME, it is essential to create as much opportuntiy as possible for professional growth and advancement. Obviously, this depends on the size and type of the business. Training, mentoring, and other methods to improve the skills, knowledge, and attitudes of employees are necessary activities for all employees to achieve higher levels of job satisfaction. When employees are challenged and have opportunities for job growth and advancement, boredom and burnout can be reduced. 

Encourage continuous improvement — Each employee has a different type of creativity and, when tapped, can help improve processes and overall business performance. Some of the best innovative ideas can come from employees actually working on specific job functions. Owners and managers should keep an open mind and solicit employees’ suggestions and recommendations. Rewarding innovative thinking can add a much-needed competitive advantage to a small business.

Summary — Throwing pebbles in a tranquil pond produces only small ripples. These ripples, however, when multiplied over and over again can create waves. Employee initiatives can be viewed in a similar manner. Small ripples can create waves that have a positive impact on productivity and pave the way for future business success. 

Posted by: 
Association of Accredited Small Business Consultants


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