Employee Management – Managing a Small Business Successfully

Small Business - September 4, 2017
Female business owner talking with employee while sitting on a couch

Without a formal Human Resources (HR) department, it can be challenging for small business owners and managers to manage employees and handle difficult situations. No matter how small your company, it is important to set formal policies, properly document job performance, and follow any applicable regulations to avoid damaging morale and your bottom line.

This checklist will help you maintain excellent employee relationships and boost productivity. If you have questions about an employment law matter call your LegalShield provider law firm.

1. Be proactive and develop an employee handbook. A carefully written HR handbook will clearly define expectations for all employees and managers. An employee handbook will also help protect your business from litigation. Your handbook should outline everything from benefits, time away from work, harassment, non-discrimination policies, performance evaluations, and workers’ compensation.

Provide each employee with a copy of the handbook and have them sign a document stating that it was received. If you need assistance reviewing or developing your company’s employee handbook contact your LegalShield provider law firm.

2. Set up a personnel file for every employee. Each file should contain the employee’s resume, job description, signed policy documents, and any other documents related directly to job performance. A personnel file should not contain personal details such as medical information, financial history, Social Security number, race, gender, nationality, sexual orientation, or any other personal information not directly related to job performance. Personal information should be kept in a separate file not to be used in evaluating an employee’s performance.

3. Provide feedback and set concrete goals for improvement. Avoid taking punitive action to correct a concern. Do not badmouth the employee around the office or talk to them in an unprofessional manner. Set specific goals and put them in writing for the employee to sign and acknowledge. If an employee fails to meet the goals you have set then you can take further action.

4. Schedule regular performance reviews for all employees. It is important to set a standard performance baseline for all employees. Focusing only on problem employees will make your actions seem arbitrary rather than purposeful. Evaluations allow you to set realistic goals for improvement and growth.

5. Address specific concerns when they arise. It is vital to discuss matters when they happen instead of waiting for a review. Waiting may make the issue seem trivial or may catch the employee off guard. Use the annual review to address how the employee has responded to any issues that came up during the course of the year.

6. Document your concerns in the employee’s personnel file. If you discuss a concern with an employee makes a note in their file. Many companies hold off on terminating employees because they do not have any documentation. Any significant discussion of job performance or violation of company policy should be noted in the employee’s file.

7. Clearly define consequences for failure to improve or to take corrective action. Failing to define what will happen if the employee does not improve provides little incentive for improvement. If an employee will be terminated for not meeting specific goals, make sure they understand that is the consequence.

8. When necessary do not hesitate to terminate an employee. Firing an employee is one of the most difficult jobs a business owner or manager can face, but sometimes there is no alternative. If you are concerned the employee may become confrontational ask another owner or manager to sit in on the termination meeting. Call your LegalShield provider law firm if you need assistance with an employment law matter.

9. Some matters require immediate termination. If an employee violates specific company policies involving harassment or customer privacy or if they steal or commit any other action that jeopardizes your business or another employee’s safety, document what happened, and take immediate action.

Launch by LegalShield is here to help!

Launch by LegalShield will provide you the expert employee advice you need.


LegalShield provides access to legal services offered by a network of provider law firms to LegalShield Members through member-based participation. Neither LegalShield nor its officers, employees or sales associates directly or indirectly provide legal services, representation or advice. See a plan contract at legalshield.com for specific state of residence for complete terms, coverage, amounts, and conditions. This is not intended to be legal or medical advice. Please contact a medical professional for medical advice or assistance and a lawyer for legal advice or assistance.