Business Basics: HR for small business


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working? Thank you, Angelique. Thank you, Christine. Thank you, Mathew. Thank you Melanie. Great, it looks like it’s all working. We also have some handouts for you which you
can access and download by clicking on this section here. Mark has kindly agreed to share his slide
deck with us, which have been specifically prepared to better understand today’s content. Please remember to download these handouts
before you exit the webinar as they will not be available after the webinar is over. During the presentation we will have the opportunity
to engage with a few questions posed by our presenter. Click on the selection to submit a response
to the poll questions so that Mark can better understand your needs. So now it’s time to bring on our presenter. Mark’s passion is making performance management
work. With over 17 years’ worth of experience,
Mark knows that at least 8% of your budget goes into trying to manage poor performance. Over the course of his career, Mark has helped
businesses reduce the time, effort and cost human resource activities take by creating
and implementing new HR strategies based on real world experience in dealing with people. He’s dedicated to helping both employers and
employees maximize their output and ensure great performance is a result of a great work
environment with great processes. So, Mark, welcome to the webinar. Thank you, John, and good afternoon to everyone
for taking the time to listen to my ideas. Just a small introduction on myself. I’ve been in HR all my life in both government,
private sector and not-for-profit, as well as since 2003 running my own small businesses
John so kindly introduced me with. And, yes, our passion is that many of the
problems that are associated with managing people are far too complicated and don’t need
to be there. So today I’d like to cover six things. I’d like to just define HR so we all agree
with what we’re talking about. Talk about some myths around HR. Talk about processes as widgets, and I’ll
come back to that. Also a concept that we use strongly called
the 2% Effect. I want to point out two practices as examples
of what I’d like you to avoid. And finally, leave something positive and
leave you with a bit of a plan and an overview, cause John did manage strategy. So I’d like to leave you with a bit of a strategy
as to how you might avoid many of the mistakes that occur in my profession. Just to get started, I’m going to push back
to John and ask him to run our first poll. And it’s just to give me an idea of the audience
and where you’re coming from. So, John, could you take over and run that
first poll, please? No worries at all, Mark. So now, ladies and gentlemen, please feel
free to select the option that suits your business and answers the question. Wonderful. Thank you so much, ladies and gentlemen. There’s room for ten more seconds. I think we’ve nearly got 100% so if you haven’t
decided now, book it in quick. Three, two, one. Awesome. So, Mark, it looks like less than … So how
many employees? Less than 15 is about 65% of the room. And everyone else is about between 15 and
50. I think it’s-
That’s the one, a real- Yeah. Yeah, I appreciate that, everybody. Thank you very much. It just allows me to tailor my presentation
to that audience. Now, there’s a second poll that will also
assist me. And, John, if I could ask you to run that
second poll now, please. Absolutely. So just like last time, ladies and gentlemen,
select the one that best suits you. Oh, a bit more of a mixed bag on this one. There are 10 more seconds, like last time. Anyone who hasn’t voted, get your votes in
quick. Two, one. Lovely. So it seems to be the most important HR issue
is finding good people. And with a follow-up, and very closely, with
leadership and morale as a follow-up on those. Excellent. Now, thank you, John, and thank you everyone
for that. I’ll certainly be trying to talk specifically
to those issues as we go through. Allow me, though, first to start with something
that I’ve learnt to do when I talk to people. What is human resource management? And the key thing is it is an activity, it’s
a function. It’s the same as marketing, accounting, production,
distribution, warehousing. It’s a function. And although it’s about people, I think it’s
very, very important to realize it’s about a function. Now, even the majority of this audience has
only a handful of staff. You will still have to do all of the things
that are listed on this screen. So on the left-hand side in blue, we have
what I might call the more positive parts of the HR function. Somebody has to do it in your organization. How you do it is the issue, the process, but
it has to be done. The list on the right-hand side of the screen,
the red list, are clearly some of the things that are generally not so nice to do. But equally they also have to be done. And if we’re going to talk about morale and
leadership, it is the combination of those two lists that’s important. And it is not the policy that you have, per
se, but I will strongly emphasize today it’s the way you go about all of those activities
that will have the biggest impact on morale and leadership. The elephant in the room, it’s a nice picture
I found somewhere, is that a lot of the HR processes, particularly in bigger business,
and this is a lesson I’d like to share with you today. When HR becomes a department or a function
in its own right and you put on a dedicated person, please understand that a lot of that
person’s time is about compliance. It’s not about the more positive side of things. Very often it’s not about building teams. So you’ve got to be very careful with the
HR support that you get in your businesses to make sure that you don’t go down the rabbit
hole of you need lots of policies because it’s a compliance based activity. If you do that, you will end up making the
same mistakes that I, many of my colleagues and certainly most businesses make. And I’d like to share with you today some
ways to avoid those. So let’s look at the second activity that
I said we’d mention. The myths of HR. The first myth actually is, and this is my
professional body known as AHRI, the Australian Human Resources Institute, have on their website
that one of the functions of a HR person is to advocate for the employee. I totally disagree. You people run businesses, you manage businesses. Taking the views and points of view of people
into account is important. But none of us are there just to look after
everybody and all their problems and everything else about their lives. They are there to come to work and do a job. And if you start to get people in my profession
that start saying, well, we’re here for the people, you need to change this and this because
the people are complaining, I don’t necessarily connect that with good morale or good leadership. It is a distinction that we need to make,
that HR is not there purely to advocate for the employees. I argue we should be there to advocate for
solving problems. Point two. AHRI also argue that my profession and many
of my colleagues are supposed to think like business people and have finance and accounting
skills. Believe me, they don’t. And I think that’s incumbent upon us to understand
if we combine the idea of compliance with a business case, we need to put pressure on
the HR people that are supporting your businesses to not only just say how is this going to,
you know, reduce my risk (compliance), but is the cost worth it? Is there a smarter way to do it? Can we achieve the same outcome with a better
process? Because I’m telling you, folks, most HR folk
unfortunately don’t think like business people and don’t have financial and accounting skills. The third myth really comes from our legal
profession. If any of you have had problems with staff
over the years, and I’m sure some of you have, you’ve gone to a lawyer and they’ve said your
policies weren’t robust enough. So from the legal perspective, they argue
that well drafted policies are the bedrock of successfully addressing people problems. And successfully addressing people problems,
as I will show you later on, has a direct connection between morale and leadership as
well. The problem is that is a myth. You don’t necessarily need a wrath or a range
or inches and inches, in the old language, of drafted policies. That is not the test if things go pear-shaped. The test when they go pear-shaped is how you
manage the situation. And I’ll share that with you a little later
on. And finally, the fourth myth about HR. It’s supposed to be scientific, apparently. The pointy head manager from Dilbert has a
different view. So here’s where I’d like a show of hands,
please. Who’s seen, heard or experienced situations
that are displayed in the Dilbert cartoon? John, how do we see the results from the hands
up, please? So that’ll be under the attendees. So we seem to have one, two, only two people
who have … Oh, three? Three people have experienced that kind of
situation that Dilbert talks about, I think. Yeah. Excellent. Thank you to John and thank you for the audience. For those small number of people, you know,
I empathize with you, I understand. For the rest of you, the manager is not necessarily
bad in the way that cartoon is portrayed. The point I want to make is that the manager
is making a judgment based on a range of factors including his personal experience. And he’s also trying to mitigate his risk
by creating a paper trail as he says in that caption. So the challenge I want to put to you is that
if anyone from HR land comes along and says that we’re scientific and we know what we’re
doing, et cetera, that is not the key. The key is about judging and managing risk
based on a lot of data and a lot of personal feeling. And we need to make sure that we understand
and accept that statement. So the third point I wanted to mention to
you was … I seem to have missed some slides. Just bear with me for one tick. I apologize for this. Okay. Sorry, I apologize. I put my introduction out of order. I’d like to now just talk about two HR processes
that I’d like you to be well aware of and avoid like the plague because they don’t work. For those of you who get big enough to have
to start implementing some sort of staff feedback or performance review type process, this particular
one is taken out of a textbook which we teach our university students. As you can see, it’s 29 steps. And 29 steps means … Or 29 decision points
means 29 opportunities for someone to make a, quote unquote, mistake. And, of course, if you make a mistake, that’s
what lawyers and unions and people like that pick you up on. So if I was to say to you I’ve got the world’s
best practice performance management system, it’s going to improve morale, feedback to
troops, demonstrate leadership. If I was to put this in place, I would be
a snake oil salesman and you should put me in jail. ‘Cause it doesn’t work. And the worst part about is, as you can see,
there are five decision points where, if you get it wrong, you have to go back and start
again. I’ve had many people in government and corporate
life tell me that that’s pretty much the way their performance management process works. The trouble is it doesn’t work, everyone knows
it doesn’t work and we need to come up with a different way of thinking about it. And that’s what I want to share with you today,
is the mistakes that big business have made. Because as some of you grow into those larger
organizations, my argument today is I want you to avoid what we know doesn’t work. This is a second document that I find quite
amusing. It’s actually from Fair Work Australia. It’s a government issued document you can
download from the hyperlink at the bottom. And it’s supposedly a fair dismissal code. Now, my problem with this document is even
though it’s giving you some guidance, the guidance is after the event. So did you dismiss the person? Well, if you did and you ticked yes to question
three, it’s too late. And this is the second problem that we have
with HR. As well as putting in process to try to mitigate
risk, we very often tell people after the event what they did wrong rather than help
guide you before you make a decision, and hopefully get it right. So a strong point I want to make today is
be very, very careful about rushing in and taking some action, particularly if it’s around
your people management stuff. Because if you get it wrong, it’s too late. It’s done. And we need to learn how to manage the situation
a little more proactively and avoid mistakes, rather than picking up the mess. And I might just say before I move on that
your staff, and I know this factually, staff are looking for leadership from their senior
management and business owners. They don’t like the people that don’t pull
their weight. They don’t like bad, clunky processes. They don’t like menial jobs. And they’re looking to you, the audience today,
to show them a better way. And if you can do that, that’s leadership
and that’s an improvement in morale. And that’s all you guys need to do, seriously. So let me just give you one final warning
before we go and move on to some good stuff. If you are in a position where you need to
put on a new HR person for the first time, and you start to hear these three questions
coming out of that person, you’re in trouble. Because very often, and I must confess I have
done this, I have done this in a corporate life. I am guilty. I apologize. The first thing that the HR person tends to
do is say you need to develop that comprehensive policy and process manual. And as I’ve already pointed out, I argue no
you don’t. It’s an old-fashioned thinking. It’s a thinking that doesn’t actually add
value and it’s a thinking that causes more trouble. The second thing that’ll come, generally after
about two or three months, is that person runs around and writes all these policies
and then they say we need to train everyone in them. Particularly bullying, harassment, discrimination. You know, we’re seeing a lot of that in the
media at the moment. And so the traditional solution is that bedrock
of well written policy that we mentioned, which I call a myth. Now we need to train everyone. And the third thing that’ll happen to you
as business owners and business managers is that your HR person will come back and say,
look, I’m so busy I can’t get the job done. I need an assistant. So in my conversation about being proactive,
I’m going to encourage you to think clearly about that list. And if you’re going to recruit a new HR person,
ask them those three questions. What’s the first thing you’re going to do
if you come in here? And if they say write you a comprehensive
HR policy, I would be warning you not to employ that person. If you accept them and then say, all right,
well, what’s the second thing, and they say we need to train everyone, that gives me confirmation
that you shouldn’t be employing that person. Because if you do, within three to six months
they’ll be coming and asking you for extra staff. So, please, understand it’s not about the
written policy that’s important. As I’m going to demonstrate to you, the important
thing is how you manage. And if you manage properly, you’ll have better
leadership and better morale. No question. So, sorry, that’s just the confirmation. Don’t employ anyone in HR, myself included,
consultants, full-timers, part-timers, if they’re going to just focus on writing your
policies and train everyone in how to use policies. It’s not where the value-add is. Now, I want to sort of shift now to two models
that we build our business on and we believe are the underpinning philosophies of creating
really good HR process which can help lead to improved morale and improved leadership. The first is by a chap named Ken Miller. Ken lives in America and he wrote this book
called We Don’t Make Widgets. Now, the irony here is that Ken spends most
of his professional life and making his money out of helping government understand that
they do make widgets. So allow me just to walk through the steps. From Ken’s point of view, and I totally agree
with him, everything we can do can be put into these steps, A, B, C and D. The factory
is the physical place where something occurs. Now, it doesn’t matter whether that’s making
a pen, making a car, mixing some paints or whether it’s an office where the accountants
are doing some work. Or the office where the HR people are filling
out forms and writing reports. The factory is the place of work, if you like. The widget is effectively the process. Oh, sorry, the factory also is the place where
the people are. So it’s the place and the people. The widget is how do they go about doing whatever
it is they do? So if you’ve got a strategic planning session,
the factory is probably the boardroom, the people are a range of people. But how do you go about doing your strategic
planning? What is your process? And you need to understand and articulate
that. Because as a result of that process, we deliver
an outcome. Again, back to my first example. If I’m a factory making pens, the outcome
is a pen. If I’m a factory making cars, the outcome
is a car. If I’m an accountant, it might be end of months
reporting. If I’m an HR person trying to recruit new
staff, the outcome is actually not new staff. It’s a recommendation saying here are the
people we’ve interviewed, here’s their resumes and here’s the recommendation. So understanding that, what is the outcome,
is something that I see doesn’t happen often enough. And D is quite critical, and in the HR space
often misunderstood. The customer is not the ultimate customer
who pays the bills. In Ken Miller’s model, the customer is the
person who gets and uses the outcome from the widgets as created by the people in the
factory. And what is really interesting to understand
there is, as I just mentioned, the recruitment process, the outcome is a recommendation. So that paperwork, that report, goes to a
more senior manager or business owner to say yes or no. So the outcome is the recommendation, the
customer is the manager. If we think about performance management and
poor performance for a tick, the interesting thing there is that the customer is not always
just the owner or the manager. It’s actually the lawyers. And Ken’s very strong on this in his book. If you think about it, just on the poor performance
for those that have had the experience, if you deal with a difficult staff member and
you terminate them and nothing happens, fantastic. But if you do terminate them and it goes a
bit pear-shaped, you’ll end up in court. And therefore all your paperwork, brackets,
that see the outcome, goes to the lawyers. So if we haven’t factored that in, if we haven’t
written our paperwork properly, if we haven’t delivered the outcome in the right format,
it doesn’t help our case when we get to the lawyers. So I really ask you to think about your business
in those four steps. The second factor that we talk about … Oh,
sorry, I missed one question. I’d like another hands up question, if I may? Can I ask you to hands up again if you agree
that your processes should be thought of as widgets? Just yes or no, please. Put your hands up. They’re looking like about, yeah, 10 people
in the room. So just under half. About half? That’s actually about Ken’s experience. He says that you get a lot of people that
understand this quickly, but he still argues that for those of you that don’t agree with
me, he would argue that you need to think about it a bit further. And I’ll just leave you with that to sort
it out yourselves. The second principle that we like to look
at and consider is this, what we call the 2% Effect. So the 2% Effect, as we define it, and you
can see on the left-hand side it’s my colleague, Dianne, in collaboration with myself, that
put this book together. So the 2% Effect, as you can read, is that
we tend to create rules for the small percentage of people who break the rules. And that covers life. Road rules are a really good example. No? The prison system wouldn’t exist if that small
percentage of people didn’t break the rules. But I’ll ask you to look very closely at the
unintended consequences. Now, if the small percentage of people are
always going to break the rules, then Di and I challenge you to say why do you need a comprehensive
set of policies as distinct from a simple set of policies? Because they’re going to break the rules anyway. And what do those complicated policies do? Unintended consequence number two, they get
in the way. And that is all the experience I have from
corporate life and government. And that’s what I’m going to ask you people
to avoid. Be smarter. Come up with ways to get your policies down
to simple rules rather than bureaucratic rules. And I’d like to just quote Di, from the book. Nothing is more distracting or more off-putting
in business than people behaving badly. Unfortunately, the 98% are generally too polite
to say anything to these people. However, they’re sitting there wishing you,
their manager, would do something about them and they can’t understand why you don’t. So if your concerns are around leadership
and morale, again, your staff are looking to you for leadership and morale. Second comment from Di’s book. The poor behaviour of performers of the 2%
also impact on the performer management of the rest of your organization. Di’s experience, and I agree with her, tells
us that the distraction caused by one of these 2%-ers can affect your productivity, of your
good employees and you, by around about 20%. So John mentioned a factor, a number of 8%
earlier on, and that comes from a richness of costs. And Di is also saying that one fifth or 20%
of your wages bill is not being used effectively because of a very, very small percentage of
people. And we both believe that’s something that
we need to address. So let me give you two examples here. Because they can both apply to small business
as you’re growing, although they both come out of corporate life. The first is the use of credit cards. A company that we worked with, their policy
was quite literally use the credit cards, you know, reasonably, as if it was your own
personal business and you were spending money on your own personal business. It worked brilliantly for many years. Unfortunately, two people, as the organization
grew, two people spent some personal expenditure on their credit card. It wasn’t actually a huge number. The traditional approach happened. The 2% Effect cut in. The company introduced a whole bunch of complicated
policies, took the credit cards off pretty much everybody, made you go and spend your
own private money and claim it back. The irony is they had a turnover of the good
people, and one of the comments she made today was finding good people. And the people that left were the good people. The people that remained behind were the two
people that broke the rule. So my argument is that was a pretty dumb way
to manage a small percentage of people who did the wrong thing. We need to learn how to manage them, not create
the bureaucracy. The second one related to dress code or, you
know, uniforms and what to wear in the workplace. And it started with a new receptionist who
was straight out of school. Literally. She was 18. And she came to work wearing a slightly shorter
skirt than the organization, being fairly conventional and traditional, was used to. And they approached me and said, oh, we need
a dress policy. And I say why? So they told me ’cause of the new receptionist. I said, well, why don’t you talk to her? Well, we don’t have a policy that we can relate
to. I said yes you do. I said your policy is dress appropriately. And they went yeah, yeah, we know that. But what’s appropriate? I said exactly. You’re telling me that she’s not dressed appropriately
but you’re not telling her she’s not dressed appropriately. Oh, so what do we do? So I literally had to coach this manager on
how to have a conversation with a young lady who was as excited as hell for getting her
first job, and no-one had told her that she just needed to wear a slightly longer skirt. Now, in this case we did help them with that
conversation. The lady was apologetic because she didn’t
know any better. They helped her sort of get a different wardrobe
over the next, you know, month or two. And nobody else got involved. No-one else had to change anything. And that is what we need to be doing more
of. So there’s just two examples that I hope you
see what we’re talking about with the 2% Effect. So my last hands up is can you please put
your hand up if you agree with the 2% Effect as defined. Yeah, looks like it’s a much more stronger
showing. I think nearly everyone agrees with that,
the 2% Effect. And again, as I experienced and mentioned
with the experience with Ken, that a lot of people struggle a lit bit initially with the
idea of a widget. Ironically, we find 100%, maybe 98% ’cause
there’s always a 2% somewhere, we find the vast majority of people understand this. But my challenge to you people, my challenge
to those that are listening today, is don’t fall for the 2% Effect. Don’t stick in those complicated policies
if someone does something wrong. Learn how to manage the situation. So we’re actually a little bit in front of
time. We’re getting towards the end of what I’d
like to do with the presentation. And when I put this slide up and call it best
practice, I have to confess that I haven’t had, you know, five years of academic research
and 40,000 reference papers to confirm it. But what I am saying is my experience over
the last 35 years, and how I’ve run my own HR consulting business, and the feedback we
get back from our clients, says that this is best practice. So I’m happy to be challenged. I’m happy to be criticized. But I’m also happy to debate whether or not
this is best practice, ’cause I believe strongly it is. So for those of you who want to improve morale
and improve leadership, there are two key points. Deal with your poor performers, and you all
have one. I have no doubt everyone listening to this
has a 2%-er that’s giving them some grief. You need to deal with them. The second thing is that everyone else avoid
the 2%. Avoid putting in those problems and complicated
policies. So let me just go back and tell you what I
believe is the best practice process. When we deal with poor performance, the issue
is only one of managing risk. And these are your high risk people. Not so much for those of you with less than
15 people. But once you start getting up over that and
getting up to 50 and a hundred people, you end up with the opportunity of unfortunately
being caught up with the legal system. It’s in that situation that these people are
your high risk ones. But the acid test by the commission, by the
lawyers, by the judges, is did you take reasonable management action in a reasonable way? That is the test. And when I see regularly when people fail
that test. I’ve even had an industrial relations, a Fair
Work commissioner tell me. I can’t remember the organization he referenced,
but I probably shouldn’t say it anyway. But he said they came along and argued that
they followed their process. And the commissioner said your process is
crap. Go back and do it again. So we need to understand that it’s not a matter
of compliance and following and ticking the boxes. It’s a matter of learning how to manage. Very different. The second point that I have found very, very
successful for the last 20 years of my career is when you have someone that comes along
and says anything that was on that red list I showed you before, poor performance, discipline,
harassment, bullying, victimization, whatever it is, don’t go there. Don’t go down that path. Have a look at what that behaviour is doing
in terms of a management problem. And identify that management problem and solve
it. So, for example, let’s just say someone is
habitually late. Now, they might be coming in, you know, 10
minutes late one day, an hour late the next day. Absenteeism might be higher than normal, et
cetera, et cetera. The traditional model is that we go and talk
to those people and say why are you late? Don’t be late again. And if you’ve had that experience, it probably
didn’t do … sorry, for a 2%-er it didn’t solve the problem. But if you turn around and say, listen, when
you’re late you cause me this problem. I can’t allocate the work. I’ve got to get an extra causal in. That just cost me four hours because you were
half an hour late. Focus on the management problem and then engage
the person in the conversation to say help me solve that problem. Now, on 100% of occasions when we’ve used
that approach, two things happen. One is that if we ever go to court it’s always
deemed reasonable, and two, when we solve that problem, irrespective of whether the
employee turns around and stops being a pain or whether they exit, someone else in your
organization will come to you, after you’ve had that conversation and solved the problem,
and thank you. And they will say we’ve been waiting for you
to deal with that problem. That is a guarantee. I’ve yet to have a manager not have that happen. So these people in your organization know
who are the 2%-ers. And partly, in my own opinion or experience,
the reason that morale is sometimes a problem is because these people are not being dealt
with. And they are looking to you, this audience,
to deal with them. Now, once we can put those people aside, once
we can manage them reasonably, my best advice for you for the rest of it in terms of morale,
development, et cetera, is pretty much get out of the way and let your people get on
with the job. Keep your processes simple. Go back and pick up on Ken’s idea. How do we go about doing our work? Can we do it more effectively? Can we cut out some of the steps without dropping
the quality? It’s amazing how much value you can achieve
for your business and for your people if you keep it simple. Secondly, don’t manage to a compliance. Don’t manage to a list of policies or that
checklist that we saw before. Manage to your values. If your values are be honest and someone’s
not honest, have the conversation. If your values are top quality first time,
no repeat work, manage to those values. That’s what it’s all about. And that leads directly into the third thing. It’s about the culture. The culture is the way you run your business. As many of my friends say, culture is not
a complicated concept. It’s purely the way we do things around here. So if you demand high quality of work out
of your staff but you’re a little bit slack, they will see that as incongruent and their
morale will drop. You need to walk the walk and talk the talk. And it’s not about the paperwork and the forms. Those paperwork and those forms are actually
part of a process for the lawyers when it goes pear-shaped. So I want to finish, and we’re, you know,
a little early. But does this work? Because I’ve certainly been making some claims
and sharing them with you. And I’d like to know I leave with you with
some other people that we’ve worked with over the years about this idea of manage your 2%-ers
and streamline your processes. And here are the feedback
that we’re getting. Now, the industries that they’re coming from
are education, mining in Africa, academia and Colette from childcare. The reason that we’ve used those examples,
and I’m going to finish here and then ask for any questions, is because when you’re
managing people the issues are about the same, irrespective of your industry. There are nuances but they’re basically the
same. And if you are going to learn a lesson from
today, I ask for you to learn the lesson that HR has grown up to become a little bit of
a bureaucratic monster. And it’s because of, I would argue, we don’t
understand Ken’s model of widgets and so we create complicated processes and we tend to
fall badly into the 2% Effect which you all said you understood and agreed with. So if you can avoid the 2% Effect and you
can look at streamlining your processes and keeping it simple, you will very quickly have
a measurable increase in morale and a recognition of the leadership that you’re offering your
organizations. So I’m going to thank you all for your time
and for listening, and I’m going to hand back to John and ask are there any questions that
need to be answered? Champion. Thank you so much for that, Mark. As I’ve been delivering workshops across Queensland,
it seems to me that HR has been the contentious and highly requested issue that is really
poorly understood and more poorly executed. So to have that kind of insight into your
wealth of experience is really appreciated. As you’ve mentioned, we do have some questions. I will encourage all of our attendees, if
you do have any questions for Mark please type them in. We will address all or as many as we can before
one o’clock. We do have a few to start off with. So we’ve got one here from Travis who says
how can I ensure I always take reasonable management action in a reasonable way? Thank you, Travis. I should have covered that. I apologize. There’s a very simple test I use and it’s
kept me out of trouble and kept the people I refer to out of trouble for many years. And it goes like this. You’ve identified you have to have a difficult
conversation with someone. Now, before you have that conversation I would
ask you to think of the following. Write down your conversation, write down your
notes. Get prepared and then ask yourself if this
happened to me, if it was my boss having the conversation to me, would I think it’s reasonable? And then I want you to do step two. I want you to say, well, if it’s not quite
reasonable, what might a lawyer think in six months’ time? Now, if you can pass those two tests, Travis,
that’s pretty much the best advice I can give you for what’s reasonable, managed in a reasonable
way. It’s not rocket science. Thank you. No worries. Yeah, Tallison here would like to ask, you
said I shouldn’t get a policy writer or I shouldn’t employ a policy writer. But don’t I need these policies when the
lawyers get involved? Tallison, the answer is you need a policy. So let me give you a really good example. If I turn around to someone and say you big,
fat, black, horrible, useless, lazy person, is that, A, discrimination, B, harassment,
C, victimization, or D, performance management? In other words, I didn’t really say it very
clearly. And, of course, it wasn’t reasonable, And,
of course, the lawyers will find an argument. So I argue very strongly and I’m happy through
John or whatever format we use to provide. I would argue that for most small businesses,
you can run your organization’s people management on the following documents. And please write these down. You clearly need some sort of job description. All right? One page does most people. Two, you need some sort of employment contract. Again, a one pager, depending on your organization,
may be acceptable. Three, you need some sort of code of conduct. Now, I’ve mentioned run your organization
by values and culture. A code of conduct is a set of rules. If you have a Christian upbringing it’s the
10 Commandments, right? It’s a set of rules. I find the Catholic thing with the 10 Commandments
a classic because we have a set of rules, then we have a Bible that’s about a thousand
pages long. Why don’t we just follow the first set of
10 rules? All right, the code of conduct. Very simple. The next one, and I’m happy to share the next
two with people, is what we call a governance policy. Which basically says if there’s a problem,
here’s the steps that we’ll use to manage it. And the last document is a governance review
policy which basically just says if someone’s not happy with the way we managed it, here’s
a second step that we’ll put in place to get an independent view. 20 years of experience tells me pretty much
that’s all you need to manage your people in your organization. Full stop. So, Tallison, I’m happy to talk about that
one-on-one later, through John or whatever. But to the audience, keep it simple. Governance policy and a governance review
policy is about all you need. Champion. Mathew would like to know what happens if
the 2% requires action? However, the business owners are those who
want the micromanagement and not the HR advisor/manager. How do I manage to get the message across
to the owner about the impact the overheads of policies would have on the circumstance? Wow. Mathew, there’s a lot in that but I’ll try
to keep the answer simple. You are quite right in saying that the problem
is you need to convince your boss or the business owner. I respect that totally. And I’ll be adamant and black and white and
very simple. You cannot take action until you have that
person onside. HR for Small Business OSB Webinar 27th November
2017 Page 14 of 17 So your frustration will not be solved until
you can get the owner onboard. Now, the best answer I can give you to get
them onboard, and once again I’m happy to share this document with people, is effectively
you need to do a business case. Again, that’s the management problem. So, hey, Mr or Mrs Business Owner, when this
is happening over here in the corner, we’re doubling our costs. We’re taking four hours too long to get a
two minute job done. You’ve got to put some numbers around it and,
as I said upfront, one of the myths of HR is that they’re good at numbers. They’re not. So a classic I can give you, Mathew, is an
organization that was having … They had a really difficult 2%-er. And the work just was not getting done. So they went and hired a contractor. So all of a sudden the organization is paying
for this person to run around and cause havoc while they pay the same amount of money to
a contractor to do the job. That was the business case for getting change. So I hope that helps you and guides you. Next one, Simon would like to ask, you mentioned
earlier when referring to the widget way of thinking that under outcomes, the outcome
of firing someone was the paperwork for the lawyers. How do you balance having the right paperwork
if things go badly without going down the checklist, procedure and all? Simon, there’s a form on my website you can
download for nothing. If you can’t find it, let me know. Basically, the format that anyone can find
on our website, download it. It’s under the resources tab. It’s called the Management Action Plan. And to pick up on the answer to Mathew’s comment,
that Management Action Plan is effectively the only paperwork we have needed for 20 years
to resolve a 2% issue. And if it’s ended in termination, that particular
format, following it properly, has led to a 100% success rate in defending any claim
of unfair dismissal. I might leave it there, John. And, again, if Simon wants to pick that up
outside of this forum, we can happily do that. Sounds like a good thing. Peter would like to follow up by asking, one
recommendation I was given as a manager is that employees model their behaviour on their
manager and other managers supervising. Have you an observation on this? I have, Peter. I’d probably disagree slightly. I will say emphatically and factually by research,
’cause I’ve done the research, the most important relationship in any organization is the immediate
relationship between an employee and the first line manager. So to some extent, yes, you need to model
that relationship and that behaviour. If I had another hands up, which I don’t,
but if I asked the audience how many of you have left a job because you didn’t like your
boss, I’d say it’d be very close to HR for Small Business OSB Webinar 27th November
2017 Page 15 of 17 90 to 100 percent. So, Peter, the issue to me is yes, you need
to model your behaviour, but it’s not a global thing. You know, you can have good managers and bad
managers and good people and bad people. The other comment I’d make, ’cause it relates
to Peter’s comment, is that I would argue that pretty much every 2%-er you have in your
organizations right now, they are actually not poor performers. And what I mean by that is they are capable
of doing their job. I would argue they’re probably disengaged. I would argue that you need, and again back
to the widget model, if you’re trying to manage poor performance but actually the problem
is they’re disengaged, then by definition you’re in the wrong game. So we need to be very, very clear about … I’m
sorry I’m going round in circles a bit, Peter, but we need to be clear about how we’re going
about the process much more than, you know, did we tick the box or does that person like
us? I might have waffled a little bit on that
answer and I apologize if I have, but I’ve tried to do it the best I can. Just another one here from Liam. I’m trying to distill this out. Based on your talk, it appears that HR seems
to be more an action of culture more than policy. Does HR exist to protect employees or the
company? Liam, thank you very much for the question. It’s actually a really critical question that
big business and my profession debate regularly. And I have an adamant, and I’ve put it up
already as one of the myths, HR people are paid by the organization. Now, that doesn’t mean they should always
say the organization is right. But it equally doesn’t mean that they should
always say the organization is wrong. So, again, if we understand the 2%-ers, and
you’ve all said you do, then those people are the ones with the loud mouths, the squeaky
doors, all those clichés. And the culture that they bring to the organization
is nothing less than toxic. And by the way, I was a 2%-er for two years. And quite proud of it. I used to go to work thinking up ways to annoy
my boss. And I was good at it. So the culture that I brought in as a 2% was
totally against the culture of the organization. So HR is not just culture and it’s not just
policy. But it should be there to help solve problems
for the business. And I know, again, that’s not a black and
white neat answer, as I was not able to give Peter. But the problem is, if HR come in thinking
they’re about looking after the employees and writing policy documents, then you’ve
got the wrong people doing the wrong job. Excellent. One more question here from Marisha. How do I quantify the impact poor performance
and all-round poor human resource management has on my business? Marisha, that’s a really easy one if you get
your head around it properly. So please write this down. One, start to look at the time that the 2%-er
is not doing their job. It’ll be a percentage. Probably somewhere between about 20 and 50. Two, have a look at the amount of the manager’s
time spent dealing with that person and the associated problems that person brings. Again, I would suggest it’s about 30% of their
day. So all of a sudden we’ve got 20% of one guy,
30% of another guy. Three, have a look at all the other people
that are doing extra work and all the workarounds because the 2%-er is not doing their job properly. When you add up those three numbers, I suspect
you’ll come to about the cost of one salary, one person’s salary. So you can go to your boss or whoever else
you want and go here is the problem. You know, Mary’s not doing her job properly. She’s doing these things and the cost is we’re
spending 30, 40, 50 grand a year for nothing. That will get people’s attention. Excellent. One last question here. If you say … Sorry, this is from Sam. If you say well drafted policies are not the
answer, what are? When I say that, Sam, the well drafted policies
I’m referring to are what the legal people would say you need. A policy on discrimination, a policy on harassment,
a policy on this, a policy on that. You know, a credit card policy, a dress code
policy. As I’ve articulated through this presentation,
the key is did you manage reasonably, in a reasonable way, for whatever the reason was? And once again, if you go back to the form
and the template on our website, it gives you the format to work your way through, find
the appropriate documentation, have the conversation and document it properly in the way that the
lawyers say that was reasonable. So you need to keep all of those policy settings
really, really simple. Again back to code of conduct and a simple
governance policy is, in my opinion and experience, all you need. Excellent. All right, it looks like we’ll leave that
there. Okay, everyone, thank you so much for attending
the webinar today. Thank you, Mark, for donating your time providing
your insight into the quagmire that is human resource management. Remember to please download the handouts before
you exit. This webinar is being recorded and will be
uploaded to the Impact Innovation Group YouTube page should you wish to view it again. You will receive an email with information
about the Office of Small Business programs, along with a short survey that will allow
us to tailor these webinars to meet your interest and needs. This will be our last webinar for this year
going forward by the Office of Small Business. But again, thank you so much for tuning in
and have a great day, everyone. And can I also thank everyone for listening
in and for your interest and your questions as well. Very much appreciated. Thank you. Thank you so much, Mark. All right, have a great day, everyone.

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