Developing Human Capital Management in SMEs

Small- medium-sized Enterprises (SMEs) have important strategic factors that must be present to gain and retain a competitive edge. The most important factor is specialized people with the skills to develop innovative solutions that provide competitive advantages and increase the organization’s survival rate.  SMEs account for 4.3% of the total land and generate 29.4% of employment (Rivas, Cano & Mendoza, 2010).  These figures represent not only high productivity and the backbone of national activity, being the main providers of large companies.

What is the commonality among these SMEs? The commonality is human capital. More specifically, organizational growth of SMEs, in large part is attributed to investing in human capital through utilization of HR analytics/metrics, training and development, performance management, etc. SMEs realize factors, i.e., training and development, recruitment and retention systems, performance management systems, progressive discipline systems are essential to achieving organizational growth.

Padilla and Juarez (2006) suggest human capital consists of primarily knowledge and skills acquired through formal and informal education in the education system and in the home. Human capital also is inclusive of training, experience and mobility of the labor force. Developing human capital is inclusive of all organization levels. Training and development all employees are essential to achieving organization growth. Managers must be knowledgeable and experienced in HR practices and procedures while managing employees and building human capital. Some tools that are essential to effectively growing human capital are:

*      Effective human resource management (HRM) policies and procedures

*      HR analytic/metrics

*      Effective job descriptions

*      Progressive discipline systems

*      Performance management systems

Are you utilizing these tools to increase your organization’s human capital? 

April D. Halliburton, President

All-4-HR & Business Solutions

website - http://www.all4hrbiz.net
email - aprilh@all4hrbiz.net

Small- Medium-Size Enterprises (SMEs) Progressive Discipline

     Characteristics of very small enterprises (VSEs) include informal structure, compression of time, irrationality and the important role of affect in the decision-making process. The concept of VSE possessing a problem in which the problem increases with size while decreasing the size of VSE is divided into four components: number effect, microcosm, proportion effect, and egotrophy effect. It is critical that disciplinary problems are not allowed to progress. They must be resolved immediately. It is critical for small businesses as they work with limited resources. 

     Human resource management HRM challenges experienced by very small enterprises (VSEs) and small- medium-sized enterprises (SMEs) vary substantially from large organizations.  As the economy is controlled in large portion by SMEs and VSEs, it is beneficial for researchers to determine what aspects determine the success or failure of these organizations. Human resource management strategies applied to HRM will determine the success or failure of VSEs and SMEs. 

     An effective HRM strategy that reflects four components discussed above is the implementation and execution of a progressive discipline policy. EVERY company NEEDS an effective progressive discipline policy. No organization is exempt. Absence of a progressive discipline policy lays the foundation for organization failure. A progressive discipline policy protects both the employer and the employee. The objective of a progressive discipline policy is to avoid the lingering effects of employee problems, thus allowing them to fester.  Everyone knows once an employee problem or issue festers long enough, it becomes impossible to resolve thus, leading to termination. After terminating an employee, starts the process of recruiting to fill the position plus the added expense of training, etc.  You see where I am going with this?

A traditional progressive discipline policy consists of: verbal warning, written warning(s), suspension and/or termination. A Letter of Understanding has proven effective in notification and administering disciplinary actions. A manager meets with an employee, discusses a problem with the employee; and negotiates a resolution. Accordingly, the Letter of Understanding identifies a problem, discusses the favorable resolution; and agrees on the favorable resolution. During this meeting the manager and employee signs off on the Letter of Understanding thus, the employee begin corrective action(s). An example is an employee who is consistently tardy to work. The employer and employee meet and execute a Letter of Understanding and the employee agrees to be on time for 6 months. 

     Execution of a Letter of Understanding puts the responsibility of the correcting the problem or issue in the hands of the employee. Thus, it is a win-win situation as the employer has advised the employee of the problem or issue and the forefront of the employee and the employee takes the responsibility to rectify the problem or issue. Sneed (1987) raves the Letter of Understanding presents the employer and employee a positive, non-confrontational manner in which to resolve employee problems or issues. 

Click here to request a Sample Letter of Understanding or Sample Progressive Discipline Policy and related forms.

April, 

President of All-4-HR & Business Solutions

http://www.all4hrbiz.biz

Stay tuned for All-4-HR & Business Solutions Lunchtime Web HR Cafè…..

References

Jaouen, A., & Tessier, N. (2009). HRM strategies and very small firm development: French cases studies. Paper presented at the 1-19. Retrieved from http://search.proquest.com.library.capella.edu/docview/192410629?accountid=27965

Case history: A positive approach to discipline. (1987). Small Business Report, 12(2), 90. Retrieved from http://search.proquest.com.library.capella.edu/docview/214381983?accountid=27965

Most managers take clothing into account when making promotion decisions, survey shows

 Workers considering wearing pajamas, a chicken suit, or parachute pants to the office may be putting their chances of a promotion in jeopardy. The results of a recent OfficeTeam survey show that 80 percent of executives said clothing choices affect an employee’s chances of earning a promotion.

Proper attire may carry less weight than it did six years ago, however. In 2007, 93 percent of executives surveyed tied professional wear to advancement prospects. Among those respondents, 33 percent said clothing significantly affects a person’s chances of moving up the ladder, versus just 8 percent who feel this way today.

The survey was conducted by an independent research firm and is based on telephone interviews with more than 1,000 senior managers at companies with 20 or more employees.  

Managers were asked, “To what extent does someone’s style of dress at work influence his or her chances of being promoted? Their responses:

• Significantly — 8 percent
• Somewhat — 72 percent
• Not at all — 20 percent

Managers also were asked to recount the strangest outfits they have heard of or seen someone wearing to work, not in observance of Halloween. The responses included:

• A dinosaur costume
• Pajamas
• Parachute pants
• A chicken suit
• Coveralls
• A space suit
• Studs and motorcycle gear
• A wolf mask

They recounted professionals who got creative with their clothing combinations:

• A T-shirt, tie, and flip-flops
• Short pants and a winter jacket
• One red sock and one white sock
• Tennis shoes and men’s knicker pants
• Shorts and house slippers
• A red suit with sporty footwear

They said that others donned apparel that left little to the imagination:

• A see-through dress
• Fishnet stockings and stilettos   
• A bathing suit
• A tube top
• A backless shirt

They mentioned that this gear was more appropriate for the gym than the workplace:

• A muscle shirt
• A sweat suit
• Yoga pants
• Very tight bike shorts

Respondents said that these outfits just didn’t make the “cut”:

• Torn jeans
• A vest with a big hole in the back
• A T-shirt with cut-off sleeves

And, they said that the following getups might be viewed as fashion faux pas both in and out of the office:

• Saggy pants
• Sandals with socks
• Flood pants

See you again Soon....  

Visit us at http://www.all4hrbiz.biz

Tele: (313) 523-8090

Email:  aprilh@all4hrbiz.biz or all4hr@gmail.com

All-4-HR & Business Solutions offers affordable, complete virtual human resource management services

April D. Halliburton, President