HR Management Basics For The Small Business

HR Management Basics For The Small Business


Figuring that they can’t afford to hire full-time human resources (HR) specialists and thinking that outsourcing this function is more pain than its worth, many SMEs deal with HR management by ignoring it as best as they can. But small businesses owners that want get to the best possible results from the people they hire must take HR seriously.

If you manage them well, your people can be your biggest asset. But if you don’t follow labour regulations and procedures to the letter and fail to unlock your employees’ potential, they can quickly become a drain on the health and profitability of your business.

Here are five steps to healthier HR for small businesses:

Draw up employment contracts and workplace policies

You need to put in place a company policy that covers your basic terms and conditions of employment, including leave, working hours, remuneration and rewards, workplace conduct and a disciplinary code.

Related: 6 Must-Do Steps to Ensure New Employees Start on the Right Foot

Encode this policy in an employment contract signed by you and your employee. Ensure that your employment contracts and policies are aligned with South African labour law by consulting the Department of Labour for free advice or paying a professional to draw up proper documentation.

Enforce your policies firmly and fairly

Once you have drawn up your policies, enforce them fairly and consistently. Don’t let small breaches of your policy slide unless you want set precedents for poor workplace discipline – if someone is late for work without permission, reprimand them the first time.

The same rules should apply to all employees and they should be enforced without favouritism or exception as far as possible. If you do need to make exceptions to a workplace rule or policy, explain why.

Performance management


Though performance management at an SME does not necessarily need to be as formal as at a large organisation, do take the time every six months or so to discuss workplace performance with each employee.

Discuss your requirements, help them set goals, evaluate performance and examine opportunities for training and development. And align bonuses and increases with performance so that employees will regard these as a reward rather than a standard entitlement.

Put a disciplinary code in place

You might require professional help in setting a clear disciplinary code for when employees are in breach of your policies. It’s important to consider the guidelines set out in South African labour law when disciplining an employee and to thoroughly document the procedures you follow in case you end up in a hearing at the Commission for Conciliation, Mediation and Arbitration (CCMA).

Be fair and reasonable – you can’t fire someone the first time you suspect they’ve called in sick because they’re off to watch the cricket.

Take the wellbeing of your employees seriously

Healthy, happy and financially secure employees are likely to be more productive. So try to ensure everyone has some basic medical cover, offer them retirement funds, and even consider income loss cover.

Related: Free SWOT Analysis Template

Remember that your employees are people with families, financial problems and bad days. You don’t need to shoulder all their personal problems, but you do have a responsibility to treat them with fairness and empathy.

Closing words

You probably did not start your business to deal with the woes of managing people but to reach your goals you need other people to take care of day-today business while you grow your passion.

Managing your employees’ expectations, performance and actions are important to get the best possible results and at all times you need to operate within the boundaries of the law.

Failing to follow the right procedures will get you in as much trouble with the CCMA as outright exploitation of your workers. It’s a good idea to understand your rights and responsibilities so that you can enjoy harmonious and productive relationships with the people you employ.

Madelein Taljaard
Madelein Taljaard is an expert in areas of employee tax and legislative changes affecting payroll. Madelein joined Sage Pastel Payroll & HR in 2000. She is currently Group R&D Development Manager for Sage Australia, Asia, Middle East and Africa, as well as Senior Product Manager for Sage Pastel Payroll & HR. She is responsible for the development of Sage Pastel Payroll & HR software as well as Sage Pastel Accounting’s desktop products. In addition, she manages the integration of Sage Pastel desktop products in South Africa into other Sage initiatives like Sage Pay. Madelein has a BCom in financial management and has 16 years’ experience in personal income tax and employee tax.