While being a little ‘gung-ho’ can be a good thing, you need to ensure your HR frameworks are mature enough to get your business going where it needs?
One of the repeated lessons we see with business is that growth is enhanced by strong foundations. These strong foundations are linked to business plans and HR frameworks that enable business to build accountability and acknowledge achievements.
Frameworks such as:
- Employment contracts;
- Position descriptions;
- Workplace policies; and
- Performance reviews
……are crucial to business success.
Here is why and how you should use them.
During my journey with wattsnext, I have been privileged enough to help out many employers, entrepreneurs, managing directors and managers, as they embark on their envisioned business success journey. Have you ever heard the phrase “I’m a man of my word and my handshake is as good as a contract”? Even if your John Wayne, this is not advised in todays modern business environment. Contracts form the basis of a strong employment relationship. Without them, an employee has little to stand on regarding their ability to question what they have agreed to, and employers can find themselves similarly at the mercy of employee demands if these are not clear.
When a business takes the step to engage employees – clear employment contracts are a great start. The benefit of employment contracts is the clear understanding of what each party is signing up for.
Employment contracts are bi-lateral, meaning that for any changes to happen it needs to be agreed and signed for by both parties. Employment contracts establish base areas such as type of employment (full-time, part-time, casual, fixed term), position, location, award and level, wage rate, hours of work, leave, allowances, termination, post-employment obligations and alignment with laws.
An employment contract is not essential, although it is highly advised to stick to a contract, rather than a handshake. Especially when you are relying on it to hold people accountable to deliver the promises they made when they signed up.
Speaking of accountability, it is best to ensure your new employees clearly know what is expected of them in the performance of their duties.
The employment contract usually references a Position Description, Outcome Profile or similar. Managers need to be able to clearly articulate what they expect their employees to do, as well as have the ability to measure the impact their efforts have had on the business’ overall business strategy.
Employees need to know so they can focus their productive efforts on achieving what the business needs. A lot of performance related issues come from the disconnect between these documents, so it is essential to have each position and its outcomes cascaded from the business strategy.
Often when a new employee is joining a company, they are caught up in the emotion of signing a new contract and quickly skim through the related policies that are attached to the contract.
Most employment contracts will have a line that refers to ‘you will abide by the company policies that relate to your employment and understand that these may change from time to time’. This means that the employer always has the right to change the rules, as long as they are legal.
As a minimum all businesses need to articulate their responsibilities around the legislative requirements of workplace health and safety, discrimination and equal employment opportunity, harassment and bullying. In doing this you also need to tell people how to make a complaint and how the business will act to rectify situations.
These are best captured in policies detailing performance management and grievances (complaints).
Companies do get to make up their own rules as well. If you wish for certain things to happen, in certain ways, at certain times, you should include these instructions within a Policy. If the company says everyone should dress like a Cowboy in their uniform policy, guess what, by signing the employment contract employees have agreed to do it.
Don’t complain later, and as a Manager these are the rules you need to follow. Any time a policy needs to be deviated around should be registered, as if this happens too often the policy should be amended.
An easy way for business owners to decide on what should be included in a policy is to ask, ‘will this apply to all my employees?’. If the answer is ‘Yes’, then you should write a policy so that it is known, remembered, and can live on longer than a discussion or an email that was sent to all staff.
Any changes to policies need to be communicated and it is best to support policy implementation with training, so no employee can pull the old ‘no one told me’ excuse. The beauty for a business in keeping as much information in policies, and out employment contracts, is so that changes can be made as a business evolves.
Unlike employment contracts that are bi-lateral, policies can be uni-lateral meaning that if the business wishes to clearly communicate its position on something and it is done in a policy, this becomes the new rule for the company. Any indiscretions against the new rules can be dealt with via performance management, which is also a policy as well.
Any business that has employees will inherently have a person who manages these people. Businesses need to ensure that the mangers have the tools to correctly evaluate the performance of their staff members.
This comes from clearly knowing what the business is needing to achieve, and then measuring if this got done over a time period. Now this isn’t just the everyday ‘how’s it going discussion’.
This is needing to be a separate retrospective and future-based discussion with staff, correlated back to the instructions that where given in the job description, and then used to evaluate if the person has lived up to the promises they made in signing the employment contract and agree that those outcomes would be achieved. If this hasn’t happened, you need to address this as a performance issue. If it has happened, the employee should be recognised so that they will continue to achieve for the business and be highly engaged.
If a Manager doesn’t do this (simply communicating expectations of the business, measuring achievement and communicating with their staff about how they are going and what they should be doing) I have to stop and ask, ‘what are they managing?’.
Lastly, I highly recommend that as part of the performance review process, early in the employees’ career you need to have a way to decide if they are doing what is required and make a business decision on if you are going to keep them on.
The word ‘Probation’ has effectively been made redundant by the inclusion of terms within the Fair Work Act 2010. This period is now determined by the ‘qualification period’ under the Unfair Dismissal legislation. This is 6 months for most, and 12 months for small businesses with less than 15 employees.
Probation was previously considered a negotiable point, but with the invention of legislation and the qualification period there is little point reducing this below the minimum. It is also noted that extending past 6 months can be risky and needed to be followed with correct performance management procedure.
The big point to make here is that at day 182 since employment, you should decide on if you’re keeping the employee. At day 183 you own them, and then any future problems will need to be correctly performance managed.
If you are a business owner or manager, you need to check the maturity of your basic HR frameworks. Using the structure of agreed employment contracts, clear instructions via a job description, understanding the rules to play by through policies, and then evaluating and recognising performance are the bare basic for any manager to do their job, and for any employee to do theirs. This is the easiest way to eliminate risk in the business and the pre-cursor for enhancing performance.
Don’t be John Wayne! Get this right, and the rest will follow!
Photo by Martin Dörsch.
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