Human Resource Management Diagnostic Model: Human Resource Processes

Tim Schuster: Hello and welcome to our podcast for “Generations and Family, Business, Past, Present, and Future.” Our hosts for this podcast are myself, Tim Schuster, a Manager in The Center for Family Business Excellence. And our other host today is …

Matt Kerzner: … Hello I'm Matt Kerzner and I'm a Senior Manager in The Center for Family Business Excellence.

TS: Matt, it's great to see you as always, sir.
MK: You as well. Happy New Year.
TS: Happy New Year to you as well, and Happy New Year to our listeners. To continue our conversation of the diagnostic model for human resource management, we discussed in our last podcast the external and internal environmental influences. We are now going to continue the conversation on human resource process. Let's start by discussing acquiring human resources.
MK:There's four areas of the human resource process and the first one is acquiring human resources. That's really finding talent. You want to make sure that you have the right people in the right place, and I've mentioned this many times in the past. But I can't stress that enough. When you're working with family businesses, the culture of a family business or a tightly held business, it's critical to have the right people in place. It comes to acquiring human resources. There's a whole methodology of what is the job that they're going to do, how long does it take, how much experience do they need to have, what's the skills, knowledge and ability? I use behavior-based interviewing and using a model that really could help find the right fit. I also encourage people to take assessments. If the employer or the organization gives assessments to find out if the individuals who are applying for the jobs have a nice fit for the organization and the culture of the family. That's really important. Acquiring it is to have the people there and ready to go. Make sure that you identify your key positions within an organization regarding succession planning, that if anybody leaves, you can look internally who you have to get ready or do you need to go outside to bring external people in. So acquiring human resources is a huge part of bringing talent in to make sure that you have a nice diverse group of people who could add to the organization.
TS: Yes. Let's start with the second one. Now let's talk about rewarding human resources.
MK:Great. When we say rewarding human resources, it's really twofold. It's rewarding and recognizing. And once you have employees that are working for you, you have your workforce, you have to incentivize them. You have to motivate them to continue doing the job that they're doing. It's more than just a paycheck. I always say when I'm working with leadership, family leaders or just leaders in general, that you could recognize somebody for doing a good job. For example, I can say, Tim, the work that you did last week was unbelievable. I really appreciate it, the value that it added, not only to me but to the department and the organization was outstanding and let me tell you some specifics of what went really well. One, two, three, right? That's recognition.
TS: It's amazing, too, especially coming from an employee's perspective, hearing that. I mean you may not realize how much of an impact that has, but it really does have an impact on an employee hearing that they did a good job and what they did well at, and then it helps them excel in their careers and helps the businesses. And there's no cost to recognition.
MK:You could recognize somebody without giving them a monetary reward. Now, the thing that I have to educate leaders on is you cannot give a reward without the recognition. Again, you can give recognition without a reward, but you cannot give a reward without the recognition. Here's an example. How many employees actually get dissatisfied or scratch their head when they get a bonus check, an increase or a gift card, but they're not getting an explanation of why they're getting it? Or the organization just gives a flat 2.5% increase. Everybody gets the same percentage of a variable comp or an incentive that's a reward, which has a monetary value by the way. That could be a cup of coffee, a movie ticket, a gas card. Where I'm going with this is anything that has a monetary value to it is a reward. Yeah, you can give recognition without giving them monetary value, but you can't give a reward without that recognition. Going back to the model, there has to be some type of system in place to really recognize those who go above and beyond the organization. They are modeling the behavior that you want and others can see that they are actually getting some type of recognition and reward, which will lead others to say, how can I get involved?
TS: That makes sense.
MK:One of the things that I'm not going to get into in this podcast is some specifics of how to recognize and how to reward, but we do introduce a model of what's called the what and why, what went well and why. Why is it important to the organization? It's a simple model that we teach managers, supervisors, directors and leadership on how to recognize and reward.
TS: We'll talk about that in one of our shows in a future segment. It sounds great. Matt, let's now discuss developing human resources.
MK: Once you bring in the right talent into the organization and you have a system to recognize them, you absolutely want to find out what I call a path of progression for them. How are they going to progression there in their current role and how do you get them ready for the next step? Especially when we talk about succession planning and retirement of individuals, especially if you have long-tenured employees, how do you develop your folks, cross train them and get them ready for the next phase? It's really doing what I call leadership training and development gap analysis—finding out what individual strengths are, what their areas of opportunities are, looking at the gap and then putting a training plan together for them. I call that a path of progression. Now you can be in the same position that you're currently doing now, but if we're trying to get you ready for a future position, how do we give you stretch assignments? Give you some formal training, some informal mentoring or formal mentoring on the job training to give you the tools that are needed to get ready for the next step. That's what we mean by developing human resources.
TS: Now to discuss the last of the human resource processes. Let's discuss maintaining and protecting human resource.
MK: That has a couple different things to it. One is safety. We want employees go home the same way they came to work—safely. We want to make sure that they have the tools, the equipment, the education, they're being safe at what they do for themselves and for others. Another thing with maintaining and protecting human resources is policies and procedures. Do you have a proper handbook that explains everything? Do you have all the policies that backup the information that's in the handbook? We want to make sure that you are doing things in a way that is maintaining someone's self-esteem and by doing that is everybody's being treated fairly and consistently? That is when policies and procedures need to be written down. The key thing here to remember is when you're dealing with a family business, a lot of information, especially when it goes from generation to generation within an organization, family or nonfamily, is usually done through what I call tribal knowledge. You got to get that tribal knowledge one, to make sure you're compliant with the laws and regulation, and then you have to make sure that you’re memorializing it, date it, and then when you are going to look at it again to see if it needs to be updated. The worst thing you can do is have tribal knowledge and then find out that supervisors, managers, directors, and even family members are being treated differently because people are interpreting things because they have nothing to look at.
TS: They are taking what they assume is correct, and there's no consistency factor there at all. To wrap this up, how can we link all of this to the strategic roadmap?
MK:For those who are listening to this podcast, we've done podcasts regarding strategic roadmaps, which really get into the mission, vision, values and the objectives that the organization wants to pursue. And then there's three major pillars. There's business development, how you're going to grow the business; the revenue, how you are going to operate efficiently. And then you have the people bucket. The third bucket is people. First of all, for any of those three major areas, it's very critical, but if you take a look at the people side, that's when you're getting into it. People is having the right people in the right places. That’s acquiring human resources. How do you develop them? The path of progression, the whole succession planning. How do you know when people are ready? This really links into knowing who you have, knowing the skill sets that they have, what are they lacking, and how do you backfill with either internal people or external people? Here's an example. When I'm working with family-owned businesses and I'm working with the owners, this is very common. When I talked to a CEO, COO, CFO, a director, but their family members, they literally rise up in the morning and work until they fall down. They don't work your standard 9-5. They work; they go home; then they work some more. When you start talking about somebody who's going to retire or transition or leave the business, there's still going to be the owner, but they're no longer going to work. Usually I find out that one job that they're doing, it's not one job. It actually, you might have to find three people to replace that one job. When you're getting into acquiring and you're working with the family business, you can't just think, “I'm retiring. I'm going to find another CEO or another leader.” But then all of a sudden you peel away with what he/she does They are the strategic thinker. They actually are the doers and if you look at 6:00am don't be surprised if you see a broom in their hand and they're sweeping. I have a lot of pride in what they do. That's when you really have to look at this and how this is linked to the strategic roadmap. When you're looking at future resource needs, you can't just say it's a one for one.
TS: Yep.
MK:That's how it's kind of linked and then you want to make sure that the initiatives and projects specifically if you're going to look to do a merger or an acquisition or you're going to look to grow a certain department or a segment of your business. You really have to look at your HR practices and figure out how you are going to staff those. How are you going to resource those? How are you going to add skill sets specifically when you're going into an area that might be adding to your portfolio of business, but you don't have that skill set today? That's how it is linked.
TS: Matt, let me tell you, we love it. Thank you so much for coming here today. We really appreciate it. And thank you for listening to “Generations and Family Business Past, Present, and Future” as part of the EisnerAmper podcast series. If you have any questions or there's a topic you'd like us to cover, email us at contact@eisneramper.com. Visit EisnerAmper.com for more information on this and a host of other topics. We hope you can listen to our next EisnerAmper podcast.