What Is Employee Management?
Employee management can be defined in a few different ways:
- It’s an umbrella term covering every action, initiative, policy, and approach associated with handling employees within a business during the employee life cycle (from hiring to retirement/separation).
- Employee management ensures that employees remain an asset to a business rather than becoming a liability. This includes everything from motivating them to be more productive and pruning the workforce by cutting out those who are weighing down a business.
- Employee management is the art and science of leading a group of individuals to achieve common business goals by ensuring they adequately delegate their duties.
Core Elements of Employee Management
Employee management varies greatly from business to business and from one management to another. It’s also highly connected to the scale of the organization. In Small to Medium-sized businesses, employee management is more hands-on. In larger organizations, HR teams have a greater role in employee management than their direct managers and supervisors.
Regardless of the size of an organization, there are a few core elements of employee management.
Employee Lifecycle Management: Proper policies and practices should be in place for the entirety of the employee lifecycle. This covers everything from hiring to separation. Without proper hiring practices, you may not hire the right employee or inflate the cost of employees from day one beyond their utility. Similarly, policies and practices associated with the roles and responsibilities of employees, work conditions, incentives, compensation, etc., should not just be well-defined but also adequately transparent.
Performance Evaluation: The employees of a business are one of its greatest assets, and one way to ensure that they remain an asset instead of becoming a liability is by evaluating their performance. Performance evaluation is a crucial part of employee management as it offers you insights, not just about employees themselves but about your management practices as well. A business should have proper metrics, KPIs, performance tracking systems, and evaluation methods in place to ensure that it has a clear picture of how employees are performing within and beyond their roles.
Compensation and Incentives: Evaluation is one part of the puzzle. The other is compensation and incentives, both formal and informal. If you ensure that you reward good behavior and performance through better compensation and incentives, you will inspire better behavior and work culture. But if good performance is not reflected in compensation and incentives, then employees will only remain with the business until they get a better opportunity. Or they may start lowering their performance to a level they believe justifies the compensation and incentives they are getting.
Work Culture and Motivation: It’s important to develop the right work culture. There is no universally accepted definition of the right work culture. You may see very lenient and forgiving work cultures in creative businesses and very structured and disciplined work cultures in more rigid industries where the following procedure is the key to success. Then you have to identify how you can motivate your employees to do their best within that work culture. Good compensation and incentives are the most potent motivators, but there is also respect, the ability to learn and improve, job safety, etc., that can keep an employee motivated.
Growth and Improvement: One of the most crucial elements of employee management is helping them grow to their full potential and then motivating them to apply that potential to their roles. This requires developing and implementing proper growth strategies. From online training to direct mentoring, there are a wide array of options available to a company to help its employees improve and grow. A strong focus on growth also motivates employees to stay with the business.
Why Is Proper Employee Management Crucial For A Business?
Employee management is crucial not just to the growth of the business but its survival. Without proper employee management, a business may be doomed to fail.
- Employees are your business’s resources and should be analyzed in the context of other resources, like finances. If you don’t have the funds to leverage the full potential of the employees you have hired, then they may simply be costly liabilities. But valuing an employee’s worth is far more complex than a simple cost-benefit analysis, and you have to take intangibles like loyalty, connection, team motivation, etc., into account as well.
- Successful businesses have the loyalty of their consumers/clients and their employees, and it’s difficult to build a loyal workforce without proper employee management strategies in place.
- Good employee management leads to low turnover rates and, as a consequence, lowers the cost of hiring and training new employees and minimizes operational disruptions and lost opportunity costs.
- Employees are a crucial part of a business’s reputation. The wrong employees or improperly managed employees can negatively impact your business’s reputation, and the opposite is also true.
Ultimately, employee management is tied to business success. There are very few businesses with powerful or unique enough business models that can survive and thrive on disposable workforces. For all other businesses, employee management is crucial to survival and growth.
Tips For Optimally Managing Your Employees
A few tips that can help you with better employee management are:
- Establish a healthy culture of communication and feedback. If you don’t know the pain points of your employees, you will not be able to improve their condition.
- Hire and train your employees the right way. Both are essential components. If you don’t hire right, no amount of training can turn an employee into a powerful asset and help them reach their full potential. If you hire right but don’t give them the tools (and incentives) to grow and improve, they will eventually become stagnant and weigh down your team.
- Personalize your employee management approach without being unfair to your workforce in general. Not every employee will be motivated by the same thing and all of them may have different reactions to enforced discipline and policies. Understanding who your employees are and how they hope to be treated by the business can improve your approach to employee management.
- Clarity regarding an employee’s role, business goals, and responsibilities, especially in a team setting, can go a long way.
The right approach to employee management can help you transform your business for the better, so it’s important that good employee management is a priority for you.
