Financial Data
Updated 27 Sep 2020

HR management best practice

Regardless of the size of an organisation or the extent of its resources, the organisation survives -- and thrives -- because of the capabilities and performance of its people.

All organisations have people -- they have human resources (HR). The activities to maximise their capabilities and performance are necessary regardless of whether the organisation is a small business or a much larger entity.

This guide will help you to understand how HR management is about developing programs that will attract, select, develop, and retain the talent needed to meet the mission and goals of your business.

Recruiting A-Players

Employees are at the heart of your business. If you want to run a company of calibre, you need to employ people of calibre. Getting quality people into your company from the start will set the tone and get things moving in the right direction. That’s why the hiring process deserves time, effort and careful consideration.

To hire quality people, you have to ensure quality people apply. The way to attract them is through marketing, which is done in much the same way as you market to customers. Highlight the aspects of your company that you’re proud of. Find ways of letting prospective employees know that your company shines at what it does. People want to work for a high-quality company, so let them know just how great you are.

Seven steps to hiring good employees:

  1. Create a detailed ad and job description that accurately reflect sthe position. List the set of skills you are looking for, the different roles that need to be filled, the necessary education and experience levels of the applicants, and the personality traits that are important to the position and the company. Next, write a detailed advert that will prevent unqualified people from applying. Post it on the Internet, in newspapers or anywhere else where you think the right people might see it.
  2. Sort through the CVs. Once the resumes are in, start sorting them out. Separate the resumes into three piles – “definitely qualified,” “definitely not qualified” and “somewhere in between.” Eliminate those “definitely not qualified,” and you will reach a more manageable number.
  3. Perform preliminary phone interviews. Before you meet face-to-face with your qualified applicants, make sure that they are at least a possibility for the position by conducting preliminary phone interviews. Have a list of questions – quick and easy ones that weed out applicants that aren’t right for the position. For example, if the position you are trying to fill requires travel, ask applicants how they feel about that. Eliminate those who are not up for it. Make sure that you are using the same set of questions for each applicant when conducting the interviews. There needs to be a basis for comparison.
  4. Conduct face-to-face interviews. After you’ve narrowed the applicants down to a few qualified possibilities, schedule face-to-face interviews. At this point in the process you already know the education, experience and basic set of skills of each applicant. This is your opportunity to ask more in-depth questions. Find out whether they are introverted or extroverted, open-minded or close-minded. Assess their behaviour and personalities. This interview is a chance for you to see how the applicant might fit in to the company’s culture. Again, be consistent with your questioning and maintain a fairly structured meeting.
  5. Pre-employment screening. Running a background check is essential. You might find that an applicant has a criminal record or that information on his or her resume is false. You can search the Web for companies that perform background checks. Performing a background check online is easy and convenient, but it’s not free, so be prepared to spend a little money. Online verification solution RefCheck is a well known pre-employment and background screening solution that helps you to know your employees and reduce the risks associated with employing staff with questionable integrity, credibility and skills. Visit for more information.
  6. Psychometric tests. Employee selection tests are becoming increasingly popular. These tests aim to provide the employer with an insight into whether the applicant will be able to cope with the intellectual demands of the job and how well they work with other people. They generally test aptitude, ability and personality.
  7. Select the candidate who is the best fit. Remember that the most qualified applicant is not always the right choice. You’re going to be spending a lot of time with this person, often under stressful circumstances, so you need to choose someone you can get on with. Obviously the person has to be a good fit for the position, but he or she also has to fit well with you and be able to grow with the company. If an applicant is intelligent, eager and open-minded, the training will be easy and the skills will develop on their own.

Retaining good employees

Bringing good employees into your company is only half the battle; keeping them there is equally important.

Employee retention basically falls into two categories: monetary and non-monetary. If any of your quality employees are looking to move on to greener pastures, you may have to pay them more to stay. To retain good employees, however, you must offer them more than decent wages and benefits.

But many employees look for other things besides money. Here are some examples:

Performance measures

To do well in their jobs, employees need an accurate job description and an annual review that lets them know how they are performing and what they can do to improve. They also need access to an employee handbook so they can understand the expectations of the organisation.


As employees show signs of readiness, be willing to entrust them with new tasks and greater responsibility to keep them challenged and engaged.


Talk to employees and find out what steps you can take to make their lives better and easier. If there are certain tasks that an employee doesn’t need to be in the office for, allow them to work from home on occasion. Sometimes it’s just as simple as letting employees work out their own schedules. If the work is not sensitive to any particular day or time, let employees work when it’s most convenient for them, as long as they are still accomplishing the same amount of work.

Recognise good work

When a day runs smoothly, tell your employees what a good job they have done – and mean it. When collections are going well, let the billing staff know that you appreciate it. In a bigger office, consider awarding an Employee of the Month, nominated by peers and announced to all employees. Any award will be greatly enhanced if the boss takes the time to deliver it face-to-face.


Employees have lives outside of work, lives that are very important to them, so don’t underestimate the power of extra time off. 

An attractive, relaxed work environment

Many employees just want a work environment where they feel comfortable, not tense. An unpleasant workplace atmosphere can be enough to cause any employee to want to quit. Make the physical environment bright and cheery. Give employees free reign to voice their opinion, and have a little fun. Employees that dread going to work rarely stay long. They are also not nearly as productive as happy employees, so keep lines of communication free and clear so that you can make work an enjoyable place for everyone.

Employee Training & Development

Employee training and development is your responsibility as the owner of the business. The responsibility of management is to provide the right resources and an environment that supports the growth and development needs of the employee.

For employee training and development to be successful, you need to start with a comprehensive and well-crafted job description. This is the foundation upon which all employee training and development activities should be built. That will enable you to provide training that the employee requires to meet the basic competencies for their job.

To do that, you need to have a good understanding of the knowledge, skills and abilities that your organisation needs now and into the future. What are the long-term goals of the organisation and what are the implications of these goals for employee development?

Share this knowledge with staff. Encourage your team to look for learning opportunities in daily activities. Explain the employee development process and encourage staff to develop individual development plans. Importantly, offer support for your staff when they identify learning activities that make them an asset to your organisation.

10 components of a successful employee learning experience:

  1. The goals of the employee training or development programme are clear
  2. The employees are involved in determining the knowledge, skills and abilities to be learned
  3. The employees are participating in activities during the learning process
  4. The work experiences and knowledge that employees bring to each learning situation are used as a resource
  5. A practical and problem-centred approach based on real examples is used
  6. New material is connected to the employee's past learning and work experience
  7. The employees are given an opportunity to reinforce what they learn by practicing
  8. The learning environment is informal, safe and supportive
  9. The individual employee is shown respect
  10. The learning opportunity promotes positive self-esteem


Delegation is an essential skill for business owners. It increases your effectiveness so you can use your time and talents where they are most necessary. It also teaches you to communicate persuasively, supervise and train, and expand your sphere of influence. To delegate effectively, you need to build a team by giving people a stake in the outcome. It’s all about inspiring and motivating your staff.

Here are some top tips:

1. Select the people for the job
Define the outcomes and deliverables of the work and the completion dates. Outline the steps for each task and decide which skills are needed, and identify the right person for the job. When you delegate a new job to someone, express enthusiasm and emphasise the importance of the project.

2 Match the person to the task 
People like to take on tasks that match or expand their skills.  To make the right match, get to know people. Find out about their experience, education, hobbies, and training. Some people work well with little supervision, while some expect routine guidance.

4. Track progress, give feedback, and help people solve problems 
Check in periodically and ask about their progress. Are they on schedule? Do they have the resources they need? Have they run up against any obstacles? Do they still understand the requirements? Monitor the work and give feedback in a positive, helpful way. If the work is behind schedule, or unsatisfactory, maintain a helpful, open attitude. Explore how improvements could be made. Ask what additional help or resources they need.

5. Allow for variations in work style 
Don’t focus on the details of how the job gets done. People work according to individual learning styles and preferences. The person you delegate to may not perform the task exactly as you would, but if you have selected skilled, talented people, they will probably do the job just as well, if not better.

6. Provide incentives and show appreciation 

Pay increases, bonuses, and promotions  – these are significant incentives for getting people to go the extra mile. You can give other rewards too, such as time off, a letter of appreciation in the personnel file, special mention, an award or a gift. Send personal notes of thanks.

Delegating mistakes

Avoid these top delegating mistakes:

  • Being hesitant to delegate.

One of the biggest mistakes that entrepreneurs make is to assume no-one can do the job as well as they can. Remember that if the job is good enough, that’s all you need.

  • Rushing to delegate

Don’t delegate without providing proper training and without giving clear expectations for performance. Assigning tasks to the wrong person or multiple people simultaneously can lead to chaos and confusion.

  • Undermining the delegation process

Once responsibilities have been delegated, employees still tend to want to ask the entrepreneur to give them an answer or make a decision instead of the person now assigned to that area. If the entrepreneur does the job for the person now in charge, it completely undermines the process of delegation.

Recognising & Rewarding Performance

Performance management is the systematic process by which you, as the business owner, involve employees in improving their effectiveness so that the company can achieve its goals and objectives. Progress toward those goals must be measured and employees given feedback. Care must be taken to develop the employee skills needed to reach these goals.

Employee performance management includes:

  • planning work and setting expectations

Work must be planned in advance. Planning means setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organisational objectives. Getting employees involved in the planning process will help them understand the goals of the business, what needs to be done, why it needs to be done, and how well it should be done.

Assignments and projects must be monitored continually. Monitoring well means consistently measuring performance and providing ongoing feedback to employees and work groups on their progress toward reaching their goals.

Employee development needs must be evaluated and addressed. This means increasing the employee’s capacity to perform through training, giving assignments that introduce new skills or giving them higher levels of responsibility. Providing employees with training and developmental opportunities encourages good performance, strengthens skills and competencies, and helps employees keep up with changes in the workplace, such as the introduction of new technology.

  • periodically rating performance

Summing up and reviewing an employee’s performance is helpful for looking at and comparing performance over time or among various employees. It enables you to check performance against the standards set in the job description and performance plan. It also informs decisions such as pay increase rates.

Rewarding means recognising employees, individually and as members of groups, for their performance and acknowledging their contributions to the business. Good performance should always be recognised as an ongoing, natural part of day-to-day experience. Daily actions, like simply saying “thank you” are more informal. Formal rewards may include money, prizes or time off.

Constructive feedback

The ability to give and receive constructive feedback is crucial to the success of any professional workplace relationship.

Giving feedback is an essential and effective tool in boosting morale, supporting career progress and encouraging good teamwork. It should make people feel that their efforts and contributions are valued. Positive feedback acts as reinforcement, strengthening the likelihood of the desired behaviour continuing. It can guide and suggest ways to improve performance and help to build relationships.

When you give feedback, avoid personalised criticism that devastates self-esteem and confidence and will make future performance even worse. Telling someone they are useless, for example, will achieve nothing. Constructive feedback is objective, non-judgemental, based on specific observations, encourages discussion and allows a positive course to be set for the future.

There are five aspects to giving constructive feedback.

1. Content

It is important to identify specifically the issue of performance involved. What specific aspect of the performance did you like and why?

2. Manner

Focus on the problem, not the person. You should be direct when delivering feedback and avoid giving mixed messages.

3. Privacy

Feedback should be given in person and in private. Allowing other people to see and hear the discussion will embarrass all concerned.

4. Specifics

Tell the staff member exactly what you have observed without diluting your thoughts into generalisations. If possible, give dates and places.

5. Solutions

You should focus on solutions. Remember, you are giving feedback to correct a problem, not to bully the person concerned. Summarise the discussion at the end so that you both clearly understand what has been said and what has been agreed upon. If necessary, arrange a follow-up meeting at which time you can both review progress.

Feedback provides reassurance and support. It is vital that positive feedback is given on a regular basis as this helps to motivate people. Prepare carefully for any formal feedback session. Think about the content of the information you are going to provide during the feedback session.

It should be specific and to the point. The feedback should focus on the issue, not the person. Consider the timing of your feedback session. Plan it so that you both have an opportunity to benefit from the experience. Positive feedback should generally outweigh negative feedback.

Management Tips

Here are some of the views that top-performing managers share:

1. Your business is an ecosystem

Great managers avoid treating the workplace like a war zone. They create cohesive teams that adapt easily to new markets and can quickly form partnerships with other companies and customers.

2. A company is a community

Your business comprises a collection of people who all have their own hopes and dreams. One of your tasks is to inspire employees to dedicate themselves to the success of their peers and therefore to the community – and company – at large.

3. Management is service, not control

Don’t expect employees to just do as they’re told. Rather set a general direction, give employees the resources they need to get the job done, and allow your people to move forward.

4. Employees are your peers

Treat your employees like children and they will behave that way. Treat them as your peers, and excellence will permeate the business. That’s because when employees take charge of their own destinies, they strive to excel.

5. Motivation comes from vision

Fear is not the way to motivate people.  As a result, employees and managers alike become paralysed and unable to make risky decisions. Rather inspire people to see a better future and how they'll be a part of it.  They will work harder because they believe in the organisation's goals, truly enjoy what they're doing and know they'll share in the rewards.

6. Work should be fun

See work as something that should be inherently enjoyable and you’ll be able to put people in jobs that can and will make them truly happy. Your reward will be a team of employees who love what they do and are committed to growing the company.