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The Green Sheet Online Edition

January 23, 2012 • Issue 12:01:02

You're never too small for an HR department

By Alan Kleinman
Meritus Payment Solutions

You have big dreams, and your vision statement says so. Your team knows what you mean by innovative, advanced, consultative and winning, right? Well, you've told them a million times, but your passion and motivation are not reflected in the workplace. These words are empty promises if your company's employees don't believe them. Entrepreneurs are typically idea people. They have the confidence to conceive of an idea, but may not have the discipline to carry it out. Investing in better technology and focusing on streamlining operations are fine. But the execution of business objectives may be missing a key component: human resources (HR).

Once an operation expands beyond the idea person, the key to success is the team and each team member. An HR professional can make the vision tangible and rewarding for the staff. Employees' skills and behaviors, coupled with the company culture, affect the ability to execute processes and deliver products and services.

If you're a small business dreaming about becoming big, you need to start thinking strategically about human resources. Paradoxically, HR can be even more critical for small businesses, because one rogue employee can ruin a small organization culturally and financially.

An effective HR professional can drive business growth by coaching and developing the management team to realize a vision and helping mid-level employees engage in their jobs and realize the importance of their contributions. Human resources affects business on all levels. Investing in this department helps businesses strengthen and grow.

How many HR pros are enough?

Every business has a unique style, culture and approach to achieving strategic objectives. HR management should reflect this uniqueness, which influences the number of HR professionals you choose to employ.

Every organization needs at least one HR professional to help determine and/or carry out all the decisions, strategies, principles, operations, practices, functions, activities and methods related to the management of people.

Maybe your accounting department or an administrative assistant is handling HR, or you've grown big enough to hire outside consultants. This is sufficient for employment compliance purposes for up to 15 employees. But this as-needed arrangement addresses only administrative needs or puts out the occasional fire. An HR professional on staff ensures that you have a proactive business partner to help craft your culture, hire the right individuals, and maintain compliance with state and federal laws.

Human resources can and should go beyond administrative duties, payroll, unemployment compensation, tax compliance and administering benefits. HR's commitment to the development and well-being of individual employees naturally lends itself to ensuring business goals are effectively communicated across all departments.

Chief responsibilities of the HR department

Here are some HR disciplines important for achieving business objectives:

  • Compensation and benefits. If you want to attract top talent, you need to know where your company stands in the market within and outside the industry. This is critical to positioning your company as a desirable place to work.

    Employee compensation - both direct (pay) and indirect (benefits) - is used to attract, recognize and retain workers. An HR professional will proactively review and stay on top of trends, as well as reach out to employees to garner important feedback.

    At Meritus Payment Solutions, we launched our first anonymous employee survey last year as an instrument to maintain open communication with our employees on compensation, as well as other important topics.

    Results of such surveys may be used as baselines against which to measure future responses. This tool demonstrates that a company is invested in employees' development and well-being.

  • Employee relations. Maintaining employer-employee relationships contributes to productivity, motivation and morale. Employee relations is chiefly concerned with preventing and resolving problems that arise out of or affect work situations.

    It's easy to get bogged down in the day-to-day challenges of running a business, and it's difficult to make time to interact with individual employees. It all comes back to continuous two-way communications.

    A few ways to keep information flowing are weekly newsletters, quarterly employee summits, an Intranet and a suggestion box. Ranging in level of formality, each method presents an opportunity for open communication.

  • Organizational and employee development (OED). This is the concept that can catapult a small company to a large company by improving its employees at all levels. OED deals with the overall arrangement of the organization and its functions. This is where management can refocus its view from "looking at the trees" to "seeing the forest."

    A continuous review process ensures that both company and individual objectives are aligned. Moreover, reviews provide multiple touch-points to recognize employee efforts and ensure their professional aspirations are being met.

    Also, cross-training new employees in all service departments smooths their paths to entry. Quickly developing comprehensive industry knowledge and skills empowers employees to make decisions and initiate improvements.

  • Ethics and sustainability. This discipline deals with organizational and personal values and their expression in business decision-making and behavior. This discipline also involves managing the societal impact of business decisions, philanthropy and the role of HR in improving the quality of life of employees, their families and the community at large.

    Philanthropic contributions are one way to engage with the community. To that end, you can increase your impact by holding community service weeks during which employees are encouraged to volunteer their individual time. In this way, the company makes a team contribution to a charity chosen by employees. Philanthropic efforts exemplify responsibility and accountability and advance the spirit of collaboration and camaraderie.

  • Business leadership. Human resources partners with leadership and all employees to meet both business goals and personal career goals. In a small organization, HR may take the form of education and encouragement at all levels. The position of manager should not be an empty title. Hold managers accountable for the development of their teams, as well as their own professional and personal growth.

    Hold monthly management training to refine and improve managers' skills and abilities, including the principals of the company. Defining metrics and goals that correlate to compensation results in performance management.

    Also, provide a forum for management to share their successes and express frustrations within their departments. By discussing current issues, sharing experiences and offering suggestions, managers create a shared knowledge base that consistently pushes the company forward.

What we've learned

Here at Meritus, we are fortunate to have experienced year-over-year growth in number of merchants and processing volume. But like any growing company, we experienced bumps in the road. By establishing an HR department, we have laid the foundation for meeting business objectives in a way that is meaningful for every employee.

By attracting the right candidates, developing them professionally and personally, and maintaining open lines of communication, we've created a team that has one vision in sight. The implementation of HR results in growth, satisfaction and achievement for both the company and individual employees. The Green Sheet, Inc.

Alan Kleinman is the Principal of Meritus Payment Solutions, the leader in advanced global transaction processing. With a client-first mentality, Meritus provides a breadth of payment and transaction processing solutions that include mobile, credit and debit cards, gift and loyalty cards, electronic benefit transfer, automated clearing house, Check 21 and more. Contact him at akleinman@merituspayment.com or 888-851-7558, ext. 141.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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