13 - HR Essentials

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					13. HR Essentials


     Interviewing	
  and	
  hiring	
  the	
  right	
  employees	
  can	
  
     be	
  surprisingly	
  challenging,	
  but	
  is	
  cri5cal	
  for	
  
     assembling	
  the	
  best	
  team.	
  


     There	
  are	
  a	
  lot	
  of	
  candidates	
  out	
  there;	
  in	
  this	
  
     chapter	
  I	
  explain	
  how	
  to	
  find	
  and	
  hire	
  the	
  right	
  
     ones	
  for	
  your	
  business	
  and	
  posi5on.


     I	
  also	
  delve	
  into	
  some	
  important	
  human	
  resources	
  
     procedures,	
  such	
  as	
  proper	
  methods	
  and	
  forms	
  for	
  
     hiring	
  and	
  termina-ng	
  employees,	
  and	
  best	
  tools	
  
     for	
  managing	
  managing	
  payroll	
  and	
  benefits.


     Employees	
  are	
  the	
  
     bedrock	
  of	
  your	
  business,	
  
     learn	
  how	
  to	
  manage	
  
     them	
  properly	
  for	
  mutual	
  
     benefit.
Interviewing Candidates

  Finding,	
  veBng,	
  interviewing	
  and	
  hiring	
  the	
  right	
  candidates	
  for	
  a	
  
  posi5on	
  is	
  more	
  challenging	
  than	
  you	
  might	
  expect.	
  


  I’ve	
  conducted	
  hundreds	
  of	
  interviews,	
  and	
  s5ll	
  find	
  it	
  difficult	
  to	
  
  discern	
  what	
  an	
  employee	
  will	
  really	
  be	
  like	
  on	
  the	
  job.


  It’s	
  best	
  if	
  you	
  have	
  a	
  referral	
  from	
  somebody	
  you	
  trust,	
  but	
  in	
  
  cases	
  where	
  you	
  don’t	
  here	
  are	
  a	
  series	
  of	
  ques5ons	
  and	
  red	
  flags	
  
  that	
  help	
  me	
  separate	
  the	
  right	
  candidates	
  from	
  the	
  wrong	
  fit:




                                                                                                               Chapter 14: HR Essentials
 Ques5ons	
  to	
  Ask


   “What’s your ideal position?”

   I	
  want	
  to	
  hear	
  the	
  in	
  candidates’	
  own	
  words	
  what	
  their	
  dream	
  job	
  
   is,	
  or	
  the	
  posi5on	
  they	
  are	
  eventually	
  working	
  towards	
  in	
  their	
  
   career.	
  


   You’d	
  be	
  surprised	
  how	
  many	
  5mes	
  people	
  will	
  describe	
  a	
  
   posi5on	
  that	
  doesn’t	
  exist	
  or	
  is	
  unrelated	
  to	
  your	
  business;	
  this	
  is	
  
   probably	
  an	
  indicator	
  that	
  they	
  won’t	
  be	
  around	
  long	
  term.
“What do you know about my company?”

This	
  is	
  a	
  common	
  ques5on,	
  and	
  simply	
  tests	
  how	
  much	
  they	
  know	
  
about	
  your	
  company.	
  If	
  they’re	
  not	
  familiar	
  with	
  the	
  basics	
  of	
  your	
  
company,	
  such	
  as	
  the	
  service	
  it	
  offers	
  and	
  how	
  it	
  makes	
  money,	
  
then	
  they’re	
  not	
  taking	
  the	
  interview	
  seriously	
  enough.



“What do you do better
than anything else?”                                           Quick Tip
This	
  ques5on	
  encourages	
  the	
                        Watch this video and
                                                              check out this article




                                                                                                               Chapter 14: HR Essentials
candidate	
  to	
  self-­‐iden5fy	
  their	
  
strengths,	
  so	
  that	
  you	
  can	
                      for a more in-depth
evaluate	
  how	
  it	
  fits	
  into	
  your	
                exploration of topics
company’s	
  needs.                                           and questions to ask.



“What’s feedback you’ve gotten from a previous
manager on an area you need to improve?”

If	
  they	
  say	
  they’ve	
  never	
  goNen	
  feedback,	
  ask	
  them	
  to	
  imagine	
  
what	
  their	
  manager	
  would	
  say.	
  This	
  is	
  a	
  bit	
  of	
  a	
  seman5c	
  trick,	
  
because	
  it	
  takes	
  the	
  self-­‐cri5cism	
  out	
  of	
  their	
  hands	
  and	
  allows	
  
them	
  to	
  describe	
  their	
  weaknesses	
  from	
  the	
  perspec5ve	
  of	
  a	
  third	
  
person.	
  They	
  will	
  tend	
  to	
  be	
  a	
  liNle	
  more	
  honest	
  about	
  their	
  need	
  
for	
  improvement.	
  If	
  they	
  can’t	
  iden5fy	
  any	
  weaknesses,	
  this	
  might	
  
be	
  a	
  red	
  flag	
  down	
  the	
  line;	
  you	
  don’t	
  want	
  to	
  work	
  with	
  employees	
  
who	
  aren’t	
  self	
  aware,	
  or	
  can’t	
  see	
  room	
  for	
  improvement.
One	
  Strike	
  Rule

I	
  have	
  several	
  red	
  flags	
  that	
  immediately	
  ruin	
  a	
  candidate	
  for	
  me:	
  If	
  
somebody	
  is	
  unprepared	
  for	
  the	
  interview,	
  I	
  get	
  the	
  sense	
  that	
  
they’re	
  not	
  being	
  truthful,	
  or	
  they	
  come	
  off	
  as	
  arrogant,	
  these	
  
usually	
  eliminate	
  them	
  as	
  poten5al	
  candidates.


For	
  me,	
  I	
  hire	
  by	
  a	
  one	
  strike	
  rule.	
  The	
  amount	
  of	
  -me,	
  energy	
  and	
  
effort	
  that	
  you	
  all	
  spend	
  trying	
  to	
  improve	
  an	
  employee	
  can	
  be	
  very	
  
detrimental	
  to	
  your	
  business.	
  


                                                           In	
  my	
  experience	
  I’ve	
  found	
  that	
  a	
  
     Quick Tip                                             candidate	
  either	
  has	
  a	
  set	
  of	
  




                                                                                                                         Chapter 14: HR Essentials
                                                           quali5es	
  that	
  you’re	
  looking	
  for,	
  
                                                           with	
  the	
  poten5al	
  to	
  grow	
  into	
  a	
  
      Check out this video                                 great	
  employee	
  through	
  
      for red flags to look                                 encouragement	
  and	
  mentorship,	
  
      out for during the                                   or	
  they	
  don’t.	
  
      interview process.
                                                             It	
  might	
  be	
  hard	
  to	
  turn	
  down	
  
                                                            candidates,	
  especially	
  if	
  you	
  really	
  
                                                         need	
  to	
  fill	
  a	
  posi5on,	
  but	
  trying	
  to	
  
force	
  a	
  candidate	
  into	
  a	
  posi5on	
  they	
  don’t	
  belong	
  is	
  like	
  trying	
  to	
  fit	
  
a	
  square	
  peg	
  in	
  a	
  round	
  hole;	
  it’s	
  a	
  waste	
  of	
  -me.	
  


In	
  the	
  long	
  run,	
  you’ll	
  save	
  a	
  lot	
  of	
  5me,	
  money	
  and	
  energy	
  by	
  
trus5ng	
  your	
  ins5ncts	
  about	
  a	
  candidate.


Over	
  the	
  years,	
  I’ve	
  found	
  that	
  lot	
  of	
  being	
  a	
  business	
  owner	
  is	
  
about	
  trus-ng	
  your	
  ins-ncts	
  and	
  inner	
  voice.
  Good	
  Management

As	
  the	
  founder	
  and	
  CEO	
  of	
  my	
  company,	
  my	
  business	
  is	
  my	
  priority	
  in	
  
life.	
  When	
  I’m	
  working	
  I	
  pour	
  100%	
  of	
  myself	
  into	
  my	
  work.	
  Even	
  
when	
  I’m	
  not	
  at	
  work,	
  50%	
  of	
  my	
  brain	
  is	
  s5ll	
  thinking	
  about	
  my	
  
business.


When	
  I	
  first	
  started	
  working	
  with	
  people,	
  I	
  no5ced	
  that	
  not	
  everyone	
  
worked	
  at	
  the	
  same	
  intensity	
  level	
  as	
  myself.	
  I	
  started	
  to	
  wonder	
  




                                                                                                                      Chapter 14: HR Essentials
whether	
  it	
  was	
  something	
  I	
  needed	
  to	
  accept,	
  that	
  these	
  were	
  just	
  
different	
  working	
  styles.




AZer	
  six	
  years	
  as	
  a	
  CEO	
  and	
  manager,	
  I	
  can	
  tell	
  you	
  that	
  I’ve	
  decided	
  
no,	
  I’m	
  not	
  prepared	
  to	
  compromise	
  with	
  the	
  caliber	
  of	
  people	
  I	
  hire.


Your	
  organiza5on	
  can	
  only	
  be	
  excep5onal	
  if	
  it’s	
  made	
  up	
  of	
  high	
  
performing	
  people	
  who	
  love	
  what	
  they	
  do,	
  and	
  take	
  tremendous	
  
pride	
  in	
  the	
  quality	
  of	
  their	
  work.
People	
  work	
  at	
  my	
  company,	
  not	
  just	
  because	
  they	
  need	
  to	
  make	
  a	
  
living,	
  but	
  because	
  my	
  company	
  affords	
  them	
  the	
  opportunity	
  to	
  do	
  
something	
  unique	
  and	
  fulfilling	
  every	
  day.	
  Many	
  of	
  them	
  could	
  find	
  
other	
  jobs,	
  or	
  start	
  their	
  own	
  companies,	
  but	
  they	
  choose	
  to	
  stay	
  
and	
  always	
  do	
  their	
  best	
  work.


I	
  can	
  tell	
  you	
  right	
  now,	
  the	
  majority	
  of	
  people	
  are	
  not	
  like	
  this,	
  and	
  
it’s	
  difficult	
  finding	
  people	
  who	
  match	
  your	
  level	
  of	
  intensity.


Once	
  you	
  hire	
  great	
  people,	
  being	
  the	
  boss	
  doesn’t	
  mean	
  simply	
  
telling	
  your	
  employees	
  what	
  to	
  do.	
  This	
  will	
  lead	
  to	
  resentment,	
  and	
  
doesn’t	
  foster	
  a	
  sense	
  of	
  accomplishment,	
  collabora5on	
  and	
  
autonomy.




                                                                                                                             Chapter 14: HR Essentials
As	
  a	
  leader,	
  your	
  role	
  is	
  to	
  set	
  a	
  clear	
  vision	
  of	
  overall	
  goals,	
  lay	
  out	
  
the	
  most	
  important	
  tasks	
  that	
  need	
  to	
  be	
  completed,	
  and	
  then	
  lead	
  
by	
  example.	
  


Be	
  mindful	
  of	
  where	
  employees	
  are	
  coming	
  from;	
  be	
  sure	
  that	
  
you’ve	
  either	
  experienced,	
  or	
  are	
  willing	
  to	
  carry	
  out	
  any	
  tasks	
  that	
  
you’ve	
  delegated	
  to	
  someone	
  else.	
  


Always	
  communicate	
  very	
  clearly	
  not	
  only	
  what	
  you	
  want	
  the	
  
employee	
  to	
  do,	
  but	
  how	
  they	
  are	
  helping	
  you	
  meet	
  key	
  goals.


Most	
  employees	
  aren’t	
  looking	
  to	
  be	
  told	
  what	
  to	
  do,	
  but	
  for	
  
somebody	
  to	
  confirm	
  what	
  they’ve	
  already	
  planned	
  to	
  do.	
  
Hiring & Firing Employees

  In	
  this	
  sec5on	
  I’m	
  going	
  to	
  dive	
  into	
  the	
  nuts	
  and	
  bolts	
  of	
  hiring	
  
  employees	
  and	
  leBng	
  them	
  go.	
  There	
  are	
  several	
  documents	
  and	
  
  procedures	
  you	
  should	
  have	
  in	
  place	
  to	
  make	
  sure	
  these	
  processes	
  
  happen	
  smoothly,	
  and	
  to	
  avoid	
  any	
  issues	
  down	
  the	
  line:




 Documents	
  for	
  Hiring	
  &	
  Firing




                                                                                                                  Chapter 14: HR Essentials
     Job Application                                                 Background Check


   You	
  will	
  need	
  a	
  flow	
  for	
                          I	
  would	
  recommend	
  
   candidates	
  to	
  find,	
                                        geBng	
  a	
  background	
  
   understand	
  and	
  apply	
  for	
                               check	
  on	
  any	
  employee	
  
   the	
  posi5on.	
  Some	
                                         you	
  hire,	
  too	
  keep	
  an	
  
   companies	
  use	
  a	
  job	
                                    eye	
  out	
  for	
  any	
  criminal	
  
   applica5on,	
  while	
  others	
                                  history	
  or	
  red	
  flags.	
  
   just	
  write	
  job	
  descrip5ons	
                             Note:	
  you	
  always	
  need	
  
   with	
  requirements	
  and	
  post	
                             to	
  get	
  the	
  candidate’s	
  
   them	
  on	
  job	
  boards	
  online.                            permission.
Offer Letter                                             Employment Agreement


Once	
  you’ve	
  decided	
  to	
                           The	
  next	
  step	
  aZer	
  the	
  
hire	
  a	
  candidate,	
  you’ll	
                         offer	
  leNer	
  is	
  the	
  
want	
  to	
  give	
  them	
  an	
  offer	
                  employment	
  agreement,	
  
leNer,	
  a	
  non-­‐binding	
                              which	
  states	
  the	
  terms	
  of	
  
wriNen	
  statement	
  of	
  the	
                          employment.	
  The	
  
basic	
  terms,	
  the	
  job,	
  and	
                     document	
  will	
  also	
  
what	
  compensa5on	
  you’re	
                             include	
  a	
  confiden5ality	
  
offering.                                                    agreement,	
  and	
  a	
  sec5on	
  
                                                            where	
  the	
  employee	
  
                                                            acknowledges	
  the	
  fact	
  
                                                            that	
  the	
  intellectual	
  
                                                            property	
  they	
  produce	
  




                                                                                                        Chapter 14: HR Essentials
Employee Non-Compete                                        while	
  working	
  for	
  you	
  
                                                            belongs	
  to	
  the	
  company.	
  
 This	
  agreement	
  prevents	
                            To	
  learn	
  more	
  about	
  
 employees	
  from	
  pursuing	
  a	
                       important	
  Employment	
  
 similar	
  profession	
  with	
                            Agreements,	
  check	
  out	
  
 compe5ng	
  companies.                                     this	
  video.




Release of Claims

 If	
  you’re	
  leBng	
  an	
  employee	
  go,	
  it’s	
  important	
  that	
  you	
  get	
  a	
  
 release	
  of	
  claims	
  agreement	
  signed,	
  which	
  means	
  that	
  the	
  
 employee	
  is	
  agreeing	
  not	
  to	
  sue	
  the	
  company.	
  To	
  get	
  a	
  former	
  
 employee	
  to	
  sign	
  this,	
  you	
  oZen	
  need	
  to	
  offer	
  some	
  sort	
  of	
  
 benefit,	
  such	
  as	
  a	
  warm	
  recommenda5on	
  for	
  their	
  next	
  job.
Types	
  of	
  Workers

There	
  are	
  two	
  main	
  types	
  of	
  workers,	
  employees	
  vs.	
  independent	
  
contractors.	
  Contractors	
  are	
  less	
  hassle	
  because	
  they	
  require	
  less	
  
work	
  on	
  the	
  part	
  of	
  you	
  as	
  the	
  employer,	
  but	
  if	
  a	
  worker	
  meets	
  the	
  
criteria	
  of	
  an	
  employee	
  you	
  must	
  treat	
  them	
  as	
  one:



      Employee

      An	
  employee	
  is	
  somebody	
  who	
  works	
  for	
  your	
  business	
  




                                                                                                                   Chapter 14: HR Essentials
      under	
  your	
  direc5on	
  and	
  control.	
  Employees	
  tend	
  to	
  work	
  
      in	
  the	
  office,	
  and	
  use	
  company	
  materials	
  to	
  do	
  their	
  work.	
  
      You	
  are	
  required	
  to	
  take	
  the	
  appropriate	
  amount	
  of	
  federal	
  
      and	
  state	
  taxes	
  out	
  of	
  their	
  paycheck.	
  




    Independent Contractor


      The	
  main	
  difference	
  between	
  an	
  employee	
  and	
  an	
  
      independent	
  contractor	
  is	
  a	
  contractor	
  is	
  paid	
  a	
  set	
  fee	
  to	
  
      complete	
  a	
  project	
  or	
  series	
  of	
  projects,	
  and	
  you	
  don’t	
  have	
  to	
  
      take	
  anything	
  out	
  of	
  their	
  taxes.	
  They	
  work	
  more	
  
      independently,	
  and	
  don’t	
  need	
  to	
  be	
  in	
  your	
  office.
Paid vs. Unpaid Interns


Interns	
  may	
  be	
  a	
  temp5ng	
  op5on	
  for	
  a	
  business	
  on	
  a	
  budget,	
  
but	
  keep	
  in	
  mind	
  that	
  you	
  may	
  be	
  legally	
  required	
  to	
  pay	
  
your	
  interns,	
  depending	
  on	
  the	
  state.	
  You	
  may,	
  however,	
  
offer	
  unpaid	
  internships	
  if	
  they’re	
  receiving	
  college	
  credit	
  or	
  
significant	
  training	
  and	
  mentorship.	
  In	
  either	
  case,	
  make	
  
them	
  feel	
  like	
  an	
  important	
  part	
  of	
  the	
  team	
  by	
  giving	
  them	
  
an	
  offer	
  leNer	
  and	
  congratula5ng	
  them	
  for	
  being	
  chosen.




                                                                                                    Chapter 14: HR Essentials
All	
  employees	
  will	
  fall	
  into	
  one	
  of	
  two	
  categories:


Exempt Employee                                        Non-Exempt Employee


 An	
  exempt	
  employee	
  is	
                        This	
  employee	
  should	
  be	
  
 somebody	
  that	
  works	
  in	
                       paid	
  hourly,	
  and	
  is	
  
 a	
  salaried	
  posi5on,	
  and	
                      en5tled	
  to	
  over5me	
  in	
  
 can	
  legally	
  be	
  exempt	
                        cases	
  when	
  they	
  work	
  
 from	
  over5me.	
  Typically	
                         over	
  40	
  hours	
  a	
  week.	
  
 applies	
  to	
  managers	
  or	
                       Typically	
  applies	
  to	
  more	
  
 a	
  technically	
  trained	
                           task-­‐based	
  jobs	
  with	
  less	
  
 workers.                                                decision-­‐making.
A	
  Final	
  Note	
  on	
  Termina5on


One	
  final	
  thing	
  to	
  check	
  is	
  whether	
  your	
  state	
  is	
  an	
  “at	
  will”	
  state.	
  
California	
  is	
  an	
  “at	
  will”	
  state,	
  which	
  means	
  employees	
  are	
  working	
  
by	
  their	
  own	
  choice,	
  and	
  the	
  employer	
  is	
  hiring	
  them	
  by	
  their	
  own	
  
voli5on	
  as	
  well.	
  Either	
  party	
  may	
  decide	
  to	
  end	
  employment	
  at	
  any	
  
-me.


However,	
  even	
  when	
  leBng	
  employees	
  go	
  in	
  an	
  “at	
  will”	
  state	
  can	
  
occasionally	
  lead	
  to	
  a	
  s5cky	
  situa5on.


A	
  former	
  employee	
  may,	
  for	
  example,	
  file	
  a	
  discrimina-on	
  claim	
  




                                                                                                                  Chapter 14: HR Essentials
arguing	
  that	
  they	
  were	
  unfairly	
  terminated	
  or	
  treated	
  improperly.	
  
These	
  lawsuits	
  can	
  be	
  expensive	
  and	
  
draining,	
  so	
  it’s	
  important	
  that	
  you	
  ‘re	
  
mindful	
  of	
  how	
  you	
  let	
  employees	
  go.


If	
  you’re	
  considering	
  firing	
  an	
  employee,	
  
be	
  sure	
  that	
  you’ve	
  been	
  giving	
  them	
  
consistent	
  feedback	
  on	
  the	
  things	
  that	
  
you	
  expect	
  from	
  them,	
  and	
  where	
  they	
  
have	
  fallen	
  short.


Make	
  sure	
  some	
  of	
  these	
  conversa5ons	
  
are	
  on	
  record,	
  whether	
  through	
  email	
  or	
  
other	
  performance	
  evalua5ons,	
  so	
  that	
  
you	
  can	
  prove	
  later	
  on	
  that	
  they	
  were	
  
terminated	
  due	
  to	
  their	
  inability	
  to	
  
perform	
  at	
  the	
  level	
  that	
  was	
  expected.
Payroll and Benefits

 You	
  may	
  be	
  tempted	
  to	
  handle	
  payroll	
  yourself,	
  but	
  I’d	
  strongly	
  
 suggest	
  you	
  let	
  a	
  payroll	
  company	
  like	
  those	
  I	
  list	
  below	
  handle	
  
 employee	
  payroll	
  and	
  taxes.


 There	
  are	
  two	
  other	
  things	
  to	
  remember	
  with	
  regards	
  to	
  
 benefits:


 1)	
  If	
  you	
  offer	
  a	
  benefit	
  to	
  one	
  employee,	
  you’re	
  legally	
  required	
  
 to	
  offer	
  similar	
  benefits	
  to	
  the	
  rest	
  of	
  your	
  employees.




                                                                                                         Chapter 14: HR Essentials
 2)	
  If	
  you	
  let	
  an	
  employee	
  go,	
  they	
  are	
  en5tled	
  to	
  be	
  
 compensated	
  their	
  salary	
  up	
  un-l	
  that	
  point,	
  as	
  well	
  as	
  any	
  
 unpaid	
  vaca-on	
  or	
  bonus	
  -me.	
  This	
  is	
  something	
  many	
  
 employers	
  overlook	
  the	
  first	
  5me,	
  be	
  sure	
  not	
  to	
  get	
  tripped	
  up	
  
 with	
  this	
  mistake.




     Payroll Services
                                                                     • ADP
      These are popular payroll and
                                                                     • Trinet
      HR services I’d recommend
      for your business:                                             • Paychex
Resources Recap

 • 	
  HR	
  and	
  Employee	
  Management	
  (course)
 • 	
  Interviewing	
  Candidates
     • 	
  Ques5ons	
  to	
  Ask	
  (video)
     • 	
  Interview	
  Ques5ons	
  (ar5cle)
        • 	
  Red	
  Flags	
  to	
  look	
  out	
  for	
  (video)
 • 	
  Hiring	
  and	
  Firing
     • 	
  Hiring	
  Documents	
  (document	
  package)




                                                                      Chapter 14: HR Essentials
     • 	
  Job	
  Applica5on	
  (legal	
  doc)	
  
     • 	
  Job	
  Descrip5on	
  (custom	
  doc)
     • 	
  Employment	
  Applica5on	
  (legal	
  doc)
     • 	
  Employment	
  Agreement	
  (legal	
  doc)
     • 	
  Important	
  Employee	
  Agreements	
  (video)
     • 	
  Employee	
  Non-­‐Compete	
  Agreement	
  (legal	
  doc)
     • 	
  Employee	
  Release	
  Agreement	
  (legal	
  doc)
 • 	
  Payroll	
  Services
        • 	
  ADP
     • 	
  Paychex
     • 	
  Trinet

				
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