As a business grows, it becomes necessary to adapt the approach taken to people management in order to ensure that it works efficiently with the new size and structure. The key to making these changes occur smoothly and as problem-free as possible is choosing the right time to make them. The larger a business becomes, the greater the need is for a formal approach and for a lot of small business owners it is a concern that these changes will take the entrepreneurial edge away and make it seem more like a large organisation.
It is a worry that employees who are passionate about the business they work for will not respond well to a formal process being implemented in place of a set of informal, unwritten rules. It is often an assumption that the introduction of strict rules puts a limit on the creativity of a new business and leaves its employees feeling uninspired and as though they are being treated less like people and more like numbers.
However, for most businesses a full, formal procedure is only necessary once the workforce expands to the point where a management hierarchy needs to be introduced. It is then that the management needs to consider whether or not the current procedures are effective for the size of the business.
Research suggests that formalising HR procedures does not need to have a negative effect on the workforce. Formal policies can ensure that each employee is treated fairly at all times. While in some companies a relaxed, informal approach to HR management works well, in others there can be issues of discrimination and other unfair treatment. A more formal approach means that this inequality is eliminated and employees who were once poorly treated are given a lifeline and a chance to enjoy their job again. In some cases, it is not necessary to change the procedures at all. If a company grows in size but employee satisfaction remains high, there is no need to alter something that already works.
For some businesses, a mixture of formal and informal HR strategies may be the best option. HR management is not black and white, and combining policies of varying levels of formality can be particularly effective for companies whose informal practices were successful, but due to growth may need to make some minor changes.
Overall, the main thing to consider when contemplating changes to HR practises is employee satisfaction. If a person is happy in their job, they are more likely to excel at it. They will be happy to go the extra mile for their company with new ideas, creativity and the sort of passion for the business that makes it stand out amongst the rest.
Here at Independent Personnel we offer a tailor made service to ensure you have the right policies and practices in place that match you and your business needs.