Human resource management for entrepreneurs

Pretty soon after getting your business off the ground, in delivering results for your customers and income for yourself, you, the entrepreneur, are going to need to get help from others.
You will need employees with whom to share the workload, to introduce certain skills that you don’t have or to handle the ‘admin’, which doesn’t come naturally to you (and which distracts you from the business of your business). So, you will begin to surround yourself with people. People who you would expect to be as passionate about your business as you are and who would expect to be treated as you would treat yourself … The essence of ‘Human Resource Management’ which, by the way, is not a department but the responsibility of anyone charged with achieving results through people, especially the CEO or owner, who sets the tone for the business.

Therefore, human resource management is a leadership function within an organisation that helps to align the workforce with the beliefs, intentions and goals of an organisation. It includes attracting, developing, organising and retaining necessary skills to meet customer and shareholder expectations, and to creating a company culture that staff can identify with and feel a sense of belonging and purpose – all of which helps to channel behaviour to drive the organisation towards its desired outcomes.

Driving results

Human resource management combines leadership, culture, diversity and human resource strategy to guide staffing activities and expectations within an organisation.

Entrepreneurs are very often the founders of the organisations where they work, and as such have a profound influence on the belief system and culture of the business. Culture is about shared values, it defines who we are and what we believe. What we believe drives our behaviour, and our behaviour drives results. Entrepreneurs have the responsibility to create a customer focused delivery culture within their business, which will lead staff to achieve business and organisational goals.

Leadership combines:

■ Envisioning (seeing clearly where the company is going and what it will look like at a later point);
■ Enlisting the right people to work in the company;
■ Empowering people to excel at their jobs and ensuring the activities done in the company will result in a quality product or service;
■ Evaluating through performance reviews and results;
■ Encouraging through training, recognition and rewards; and
■ Embodying assumptions and expectations through creating a culture and belief system that will produce results.

Apart from envision, which generally takes place early in the organisation development or at strategic milestones, each of the other leadership functions are human resource management functions. Human resource management enlists skills and talent through carefully planned recruitment steps:

1. Empower people through job descriptions and employment contracts;
2. Evaluate activities and outcomes through performance appraisals;
3. Encourage through performance management agreements; and
4. Embody through policies, procedures, and defined norms within the organisation.

Human resource management is therefore a leadership function in an organisation. A function that supports and develops the founder’s ideas and expectations for the business into manageable elements, for staff to know and grow into so that that they will be able to contribute to organisational goals in a meaningful and productive manner.

A legislative framework

Human resource management has a big role and responsibility in helping entrepreneurs ensure that assumptions and expectations within the organisation drive the right behaviour.

The desired outcome for human resource management being that staff align themselves with the organisation’s belief system, values, structure, and take self-directed action to help the organisation reach desired results.

Good human resource management practices combine individual and group ability, to create inspired leaders who work tirelessly to contribute towards reaching organisation goals.

Bad human resource practices create followers of the organisational vision, who require constant supervision, reminding and micro management, to do the bare minimum of what is required in their job function.

Human resource management does not end with creating a belief system and culture to drive behaviour. It also includes a legislative framework, which is necessary from an employment and compliance perspective, and introduces best practice gained from many other companies over millennia. The foundation of our South African legal practices is deeply rooted in our Constitution, and is a platform to ensure fairness and equal opportunity.

South Africa has one of the most advanced and respected human resource management legislative frameworks in the entire world. It is open and transparent, and gives both employers and employee rights and responsibilities in all circumstances of employment.

The various Labour Acts enforce basic conditions of employment; by

■ Providing a framework for dispute resolution, retrenchment, and appointing of new staff members;
■ Managing grievances and conflict in the workplace;
■ Suggesting suitable parameters in guiding collective bargaining;
■ Helping focus employment equity development and encouraging diversity; and
■ Structuring and funding for skill development, mentoring and training.

The legislative framework provides guidance and structure for virtually every circumstance that could arise in employment relationships. Collectively the Labour Acts provide direction to encourage and support fair and equitable interactions, considerations and outcomes. We are truly fortunate as entrepreneurs and employers to have a well thought through and practical legal framework governing the employer/employee relationship, which a visionary and principled entrepreneur will not find daunting to work within.

With employment practices compliant with statutory requirements and an ‘on-side’ work team, the entrepreneur is freed from the distraction of ‘background noise’ to focus on what he or she does best, growing the business!

Investing in human capital

Your business has grown and with it the number of people you employ. This is your investment in human capital. As with all investments, this particular asset must be properly managed or, as it is people we are talking about, provided with leadership.

Inevitably, increasing the numbers of people brings with it, increasing complexity! Most entrepreneurs find it difficult to cope with people induced complexity as it distracts their attention to running the business like no other! The DRG Outsourcing experience with enterprises that have grown their employee numbers is that they have not been managing this growth with forethought and in a structured fashion. The numbers have ‘just happened’ to support the growth of the business, with very little regard for best-practice people management processes.

South African employment-related law also introduces unavoidable complexity in terms of compliance. With greater numbers of people, enterprises cannot continue to operate ‘under the radar’. Entrepreneurs are often overwhelmed by people induced complexity – finding it a far greater challenge than any brought by day-to-day business activities.

There can be no substitute for leadership! The ‘absentee owner’ will soon suffer a decline in business performance. Simple steps to establishing Highly Engaged People taking Self-Inspired Action … for Results in your workforce include:

■ Helping your people to understand something about how your business works;
■ Helping them to understand where their job fits into the business and how it adds value – the purpose of my work;
■ Encouraging your people to hold themselves accountable and take responsibility, as adults;
■ Letting people know how the business is doing, reinforce their role in achieving business success; and
■ Recognising and rewarding performance using a properly designed approach (encouraging entrepreneurial behaviour).

Entrepreneurs, as business leaders, expect their team members to deliver their work outcomes with the same passion as they themselves have for their business. They expect them to treat customers as their own, hold themselves accountable for quality, to take ownership of managing cost and to understand the importance of positive cash flow. Unlike many conventional businesses, such awareness lies beyond the job description or the key performance area.

Entrepreneurial leaders will seek to infuse their passion for business into their team members’ own sense of values by creating a working environment enabling them to behave as entrepreneurs in their own right.

David White is the Chief Executive Officer at Business Fit.

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