Employee Management Guide for Small Business Owners

You’ve got plenty on your plate as a small business owner, and chances are you’re not doing this all alone – your employees likely pull a lot of this weight. That’s why employee management is perhaps the most important task on your plate. This guide to employee management for small business owners can help you stay organized and manage your company more efficiently. Below, learn some tips on how to master communication, teamwork, goal-setting, and more.

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The importance of communication in the workplace

A significant part of effective employee management is effective team communication. That’s because workplace communication:

  • Keeps everyone on the same page. If you give your team a project without communicating who’s responsible for which part, two people could accidentally work on the same task. That’s hours of precious time lost on duplicated efforts. If you had just communicated the responsibilities of the project ahead of time, everyone would be on the same page and much more on track.
  • Defines your team’s goals. Presumably, you have certain expectations your employees must meet on a regular basis. But how sure are you that your employees know these expectations? Clearly communicating them ensures your team understands your demands. This way, your employees are putting in work that gets the whole team where it should go.
  • Leads to positive company culture. Think about your most meaningful personal relationships –tou likely value them because they feel meaningful and rewarding. Open communication can be similarly beneficial in workplaces, where colleagues in constant conversation can feel more connected. The more connections forged, the more positive your company culture will be.
  • Holds your team accountable. Conversely, there will inevitably be times where you need to hold your team accountable. Communication gives you both the preface for stepping in and a path for actually doing so. If you’ve clearly explained an employee’s goals and tasks and they drop the ball, your employees will know what is expected of them, and if their performance is falling below that standard. Then, you can use your established communication methods to speak with the employee about improvements.
  • Enables your employees to share feedback and concerns. Communication should be a two-way street – sometimes, you’ll be the one who could benefit from constructive feedback. Maybe your communications are so brisk and stern that you’re coming off intimidating when you intend to foster creativity. Or maybe your communication style doesn’t give your team the resources they need. When your team can communicate these concerns to you, you’re all more likely to succeed.

Employee management best practices

Below, several employee management best practices are grouped into eight key areas:

1. How to foster effective teamwork

Effective teamwork is more likely when you and your employees:

  • Respect one another. In respectful environments, your employees will feel more comfortable and inclined to believe in the team’s work and processes. They’ll also feel more open to sharing their perspectives, which can include valuable advice that improves your work.
  • Share values. Ensure that your team knows your company’s goals, mission statement, and values. This way, everyone is working toward the same end, thus streamlining your teamwork.
  • Work under effective leadership. As a leader, you’re in the unique position of functioning both as a teammate and a guide. To that end, you’ll need to set examples for your colleagues to follow. Hit all your deadlines, put in top-quality work, and trust your team to fulfill their roles. If you do this all, your team likely will too.
  • Emphasize adaptability. Team members who can rotate among roles quickly make for more effective teams. When a team can reach all its goals no matter what, getting everyone’s processes aligned is that much easier.
  • Manage conflicts. Workplace conflict is inevitable. There’s a difference, though, between a blowout and a serious but empathetic conversation. Teach your team how to have the latter so that conflict is minimized. A team with fragmented connections simply can’t work to its full potential.
  • Split tasks evenly. Every employee’s workload should be roughly the same. Their tasks should also be activities they’re qualified to handle and interested in doing. Be sure to track each employee’s progress so you can figure out if you need to shift team members around.
  • Remain transparent. Teams that don’t have the maximum possible insight into their members’ work, challenges, and successes can’t reach their goals as easily. Team members with open channels into each other’s work lives are more likely to link up and collaborate on goals, which leads to greater productivity levels.
  • Recognize and appreciate one another. At the end of the day, few things have a greater impact on employee motivation than positive reinforcement. Regularly recognizing and appreciating your employees is a great way to provide this positivity. More information about how to do so is available later in this guide.

2. How to create an employee development plan

The best leaders figure out how to grow their employees from their current roles into more demanding, exciting ones. That’s because employees who grow alongside a company often feel more motivated to see the company succeed. To help your employees grow in this way, you’ll likely need an employee development plan.

A great employee development plan offers training opportunities that pertain to both your employees and your company. That said, an employee interested in growing isn’t always ready to move up, so assess whether now or later is the time to start the employee’s development. Then, set up a plan based on available opportunities that you know of and regularly check in on the employee’s progress.

3. How to set employee goals

Employees perform better when they’re working toward goals that come from leaders. This way, they’ll know what work they must do and how to do it.

Any employee goals you set should be SMART: Specific, Measurable, Attainable, Relevant, and Time-based. This way, employees can work on tasks with clear details and tracking processes, and their assignments will be realistically achievable by the deadline you’ve set.

Your employees can be involved in your goal-setting process as well. To make goal-setting a team effort, you should get your team on the same page about processes and expectations. Sharing some example goals can help too. Once you’ve aligned everyone, assemble a shared calendar to display whether your deadlines are realistic according to everyone’s schedules. Then, detail your tracking metrics and explain how employees can request goal adjustments.


4. How to give feedback to employees

Employee feedback can be a tricky part of effective management. There’s a line to walk between coming off harsh and giving employees the constructive criticism you know they need. Complicating matters is that immediately providing feedback can prevent employees from making mistakes, but delivering feedback when you’re most bothered can make you appear intimidating. Of course, there are solutions to all these feedback-related problems.

Try setting up regular feedback sessions or one-on-one meetings in which you give fair, specific feedback. Remember that an employee’s way of doing things, given their background and skills, may differ from yours, and often, that’s okay. Try to give an equal amount of positive and constructive feedback. Consider giving the employee in question a preview of your feedback session beforehand so they can prepare to explain their perspective.

At the end of your feedback session, offer some next steps and allow the employee to give you their own feedback. This way, feedback becomes a two-way, rather than a one-way, street.

5. How to recognize employees

Employee retention, performance, and engagement are all key to long-term company success. For example, when employees constantly come and go, you lose their expertise, not to mention the time and money you’ve spent training them. To retain high-performing employees, you should implement employee recognition initiatives.

Tried-and-true employee recognition ideas include highlighting employee accomplishments, making small but meaningful gestures, and turning your break room into an especially fun space. It can also mean giving employees more choice and flexibility in their workdays, getting to know your employees outside the workplace, and simply saying “thank you” more often. Anything that tactfully shows your employees how much you value them can be worth the effort.

6. How to keep employees motivated

Let’s face it: Work can be exhausting. Even employees who love their jobs sometimes get overworked or deal with personal stresses that bleed into their workdays. As a small business owner, it’s on you to keep your employees motivated both when employees are feeling driven and when they are not.

An inviting office space helmed by a respectful, supportive, transparent leader is a great start. So too are opportunities for employees to grow and earn incentives. Flexible scheduling can be especially helpful, as some employees simply work better outside the traditional hours of the nine-to-five workday. Perhaps the most important thing is to address your employees’ wants and needs. This way, your team appreciates you and feels more motivated to work for you.

7. How to appreciate employees

Although the first Friday of every March is Employee Appreciation Day, you should consistently go out of your way to appreciate your employees. After all, when employees feel seen, they’re more likely to stick around and do their jobs well.

Where employee recognition initiatives regularly shout out your team, employee appreciation ideas are bigger once-in-a-while gestures. They can include happy hour with the team, remote meal deliveries that you pay for, gift cards, or group chair massages. These occasions can function as employee gifts, which employees do appreciate.

8. How to manage remote employees

Remote work means a lack of in-person interaction and, often, an abundance of distractions. It also eliminates casual office conversations that help improve employee performance the very moment potential issues arise. In other words, it’s missing a lot of what makes offices special. But it’s also here to stay, for now, given the COVID-19 pandemic, and, as a small business owner, part of your role is to effectively manage your remote team members.

Doing so is a matter of setting expectations, implementing cloud-based project management and time tracking software, and conducting regular employee one-on-ones. You should also make up for the isolation that can accompany remote work by carving out social time with your entire team. Arrange for video conferencing happy hours or, if feasible, in-person events. No matter what, make yourself consistently available so that, even from a distance, your team remains connected.

With these tips, you’ll manage -- and manage well

No two small business owners have quite the same management style, but the most successful leaders prioritize all the same things. Teamwork, goal-setting, employee development, transparency and employee motivation, recognition, and appreciation – it’s all part and parcel of great employee management. So too is constantly figuring out how you can improve as a manager, and the SmartBiz Loans® Learning Center has plenty of employee management resources. Just as you’re there for your employees, these resources are here for you.

WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.