Beyond the Water Cooler: 7 HR Best Practices for Small Business Owners

By Cori McClish on Nov 02, 2018
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Most business owners agree employees are their most valuable assets. So, it follows that maintaining a desirable workplace where people enjoy their jobs is imperative to a company’s long-term success. But managing day-to-day human resource challenges can be difficult for any business – especially a smaller firm with no dedicated human resources staff.

Following best practices for people management and workplace excellence almost always translates to improved employee recruitment, retention and productivity. Planning in advance how to handle some of the most common HR issues will pay off for busy small business owners who are pressed for time and resources.

1. Smoking

Even though Kansas, Missouri, and several other states have passed laws that forbid smoking in places of employment, it is still allowed in designated areas. Non-smoking employees may find it offensive when smoking odors waft their way back into the areas where smoking is prohibited, especially if they work in close proximity to colleagues who smoke.

To mollify both non-smokers and smokers, establish a clear personal hygiene policy –ideally included in an employee handbook – that mentions odors. Privately suggest to smokers that they wait a few minutes after finishing a cigarette before returning to their desks or wear a jacket while they smoke and remove it afterward to minimize the smoke smell as much as possible.

For non-smokers, consider accommodations such as an air purifier or fan. Read more about this topic here.

2. Dress Code

A closely related subject is inappropriate attire. As an employer, you have the right to set the standards of dress and grooming for your workplace. But you cannot institute dress code or appearance policies that interfere with an employee’s religious beliefs or practices unless it creates a safety or workplace hazard.

To avoid confusion, use specific language when writing your dress code policy. For example, instead of saying “business casual,” stipulate that all collared, golf, and polo shirts are acceptable, as well as blouses for women. If you don’t mind nice jeans, you may wish to stipulate that denim without holes or fraying may be worn.

If an employee arrives at work dressed or groomed inappropriately, privately explain that he or she is violating the dress code and ask the person to go home and change. Follow the Fair Labor Standards Act rules for payment of time off. If the employee is non-exempt, the FLSA does not require you to pay him or her for this time away from work. More dress code tips can be found in this blog post, The Dos and Don'ts of Workplace Dress Codes, from the HR experts at Axcet HR Solutions.

17 Labor Laws Every Small Business Owner Should Know

3. Bathroom Breaks

Another item you might want to cover in an employee handbook is a rest period policy that complies with state and federal laws. Refer to the policy in case you identify employees who are, for example, taking unusually long bathroom breaks.

In such cases, it’s best for an HR representative to speak privately to the employee in question to determine a reason for the lengthy breaks, such as a medical condition. If longer-than-average breaks are medically necessary, ask the employee to provide certification from a doctor and to complete Family and Medical Leave Act paperwork, if applicable, to ensure the additional time is protected.

If no legitimate reason exists for an employee to take excessively long breaks, try to resolve the situation through other accommodations, such as scheduled rest times. Read more tips read our blog post, Ask the HR Expert: Long Bathroom Breaks.

Long Bathroom Breaks

4. Employees Discussing Pay

You should not include a policy prohibiting employees from discussing their pay with each other in an employee handbook. The law protects employees’ rights to reveal their compensation to each other, and the Department of Labor has reported that pay secrecy actually increases an employer’s liability risks in equal pay claims.

Read more about this delicate legal issue in the Axcet HR blog post, What Employers Can Do When Employees Discuss Wages.

5. Employee Departures

Employees are not required by law to give notice before they quit their jobs, even though it’s customary to do so. However, when an employee leaves unexpectedly – especially if he or she has not given notice beforehand -- it can create rumors, speculation and workplace anxiety. To mitigate the disruption, be sure to:

  • Conduct an impromptu exit interview, if possible, to glean any insights that could reduce the likelihood of future resignations without notice;
  • Reassure employees, especially those who are directly affected;
  • Implement your succession plan for the position, or establish one, if there isn’t one in place already; and
  • Resist the temptation to be vindictive.

Read more in our blog post about what to do when an employee resigns without giving notice.

6. Offboarding

Most of the time, employee departures are standard and relatively uneventful. Nevertheless, a structured offboarding program is still highly valuable. With baby boomers retiring in astounding numbers and younger employees staying at companies an average of just 1.3 years, and offboarding program allows for a smooth transition and will provide insights that help you run your company better.

Among other strategies, offboarding should include processes for:

  • Capturing and transferring a long-time employee’s knowledge;
  • Updating public-facing communications, including your website and marketing materials;
  • Revoking access to your computer and email systems; and
  • Providing letters of recommendation.

Other offboarding recommendations in our blog post, 10 Steps for a Successful Employee Offboarding Experience.

Sometimes, of course, you may decide that keeping someone on the payroll is no longer in the company’s best interest. But firing someone shouldn’t be a hasty decision. Follow these tips to help avoid hard feelings and legal issues, such as wrongful termination lawsuits:

  1. Document performance issues or conduct violations as they occur, and provide feedback to problem employees so they have an opportunity to correct the situation. If they don’t then change their offending behaviors, it should not come as a surprise when they get fired.  Such documentation will help minimize the risk of a lawsuit claiming unfair treatment or discrimination and will validate the decision to terminate an employee if he or she decides to sue the company.
  2. Be professional. Since the way a business owner lets employees go influences their decision to file a lawsuit later, be sure to:
    • Fire them in a private location
    • Keep the discussion brief and professional
    • Stick to the facts
    • Don’t do it alone, in case you need a witness later
  3. Make sure to complete, issue and file the terminated employee's final notices, such as COBRA information, paycheck, benefits administration, nondisclosure or severance agreements and other applicable forms.

10 steps for successful offboarding

7. Managing HR

Small business owners are experts in their fields but usually are not pros in human resources – an area of vital import to day-to-day operations. HR missteps can lead to lost productivity and, worse, to legal woes for entrepreneurs who have enough challenges as it is.

Nov 2 CTT

That’s why many companies turn to outside resources for HR administration and management. A professional employer organization can seamlessly become an organization’s go-to source for overcoming inevitable HR challenges. An experienced, reliable PEO acts as a firm’s HR department, relieving owners and managers of administrative and regulatory burdens like recruiting and hiring, payroll, employee benefits management, testing, training, and risk management.

A PEO can free up time that business leaders can use to focus on long-term growth and success. To read more about how a PEO can help you maintain a quality workforce and eliminate the administrative HR tedium, check out this white paper, The Small Business and Its Inherent Human Resources Shortfalls.

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Written by Cori McClish

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Table of Contents

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8 Factors Impacting Your Employee Health Care Costs
How the Tax Cuts and Jobs Act Affects Businesses

How the Tax Cuts and Jobs Act Affects Businesses

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