October 2005 Insight Newsletter

Bad Bosses? Small Organizations? (2)

Statistics show almost 99% of the 2.4 million businesses in Canada have fewer than 100 employees, most of those having little or no formal human resources (HR) management other than technical or records management carried on by a payroll or finance manager who’s been stuck with the responsibility. The largest segment, with fewer than 25 employees, have essentially no HR advisors at all.

Few individuals would start a business without outside advice for legal issues, record-keeping, bookkeeping, payroll and other financial tracking among the very first things they set up and seek assistance with. When it comes to HR with its complex legislation and often difficult challenges of managing, disciplining, performance monitoring, measurement, motivation and many other “routine” HR tasks, the vast majority seek no formal guidance or support whatsoever. Far later in business development, when they run into a problem with someone, they ask around, mull things over, try to ignore it, quash it or hope they pick a logical course of action.

Some legal advisors can provide technical answers about what’s in HR legislation, but usually not much guidance about how to actually speak with an employee who’s having a problem. Managers tend to rely on how they were treated in the past, judging whether that was good or bad as a guide to handling others the same way or differently.

This can actually work – up to a point – depending on how much time senior managers are able to give to thinking through such matters and whether their past experiences have given them ideas needed to “do HR” more or less effectively.

20 of 21 “Bad” Bosses?

Sadly, one only has to read news items such as the recent survey about bosses conducted by Monster.ca to see that many managers aren’t perceived to be highly effective. On a scale of -50 to +50, the average Canadian boss rated -2.5 or just below “fair.” The highest average achieved on any scale was about 7.0. This is not surprising when they go on to identify 21 types of bosses, with only one deemed “great” while the others all have serious flaws that make them variations of awful. The best thing, we can hope, is that employees only have to deal with those 20 bad types of bosses occasionally during any given work day.

Nor is the situation much better in large companies, even those with large, effective HR departments. That’s because any one boss usually impacts fewer than 100 employees directly and rarely if ever seeks any HR advice, while trying madly to understand budgets, financials, sales, marketing and a host of other important business matters. Most bosses in big companies are managing HR very similarly to small organizations – by the seat of their pants.

Since we’ve all been managed at some time or another, we have models to go by, but are rarely aware of what our employees think of our approaches. So called “360-feedback” can help, but it’s mostly a one-time event at best. Many studies show it can go often seriously wrong if not handled very carefully, triggering witch hunts, retaliation or at least worse behavior than before.

When Do You Need HR?

Most organizations think about this as they begin to grow to over 30 to 60 employees. Below that level, a small group of like-minded managers typically operate the organization as a team, following whatever process they’ve evolved and become comfortable with during the early growth period. True employees, as opposed to the manager team members are handled as extended team members, informed, guided and evaluated by the core team managers directly. Everyone knows everyone. Everyone is involved in and aware of the day-to-day work fairly directly and know who’s pulling their weight or not. As long as at least one of the senior team is HR issue-friendly, and is supported by the others, this can create a great work environment.

Should every business rush out and hire a full time HR manager? No, it may not be cost effective. Even in large organizations the average ratio of HR is about 1 for each 120 employees. Unlike bookkeeping tasks which must be carried out daily, true HR challenges requiring expert advice arise only rarely, so a single reasonably effective HR manager with assistance with basic paperwork, payroll, etc., can often supply full basic support to organizations from 40 to 200 or more depending on the complexity of daily issues. This individual can find consultants and should be able to learn to use them for rarer, more challenging matters.

Most very small organizations need significantly less than half a day a week of input from an HR manager/advisor on a somewhat irregular, as needed basis. Even for many small or mid-size organizations of 20 or more employees having a senior HR advisor/specialist individual or an expert consulting group on retainer (typically for about $1000 to $2500 per month or even less) is a great investment, even if they add an internal HR manager who’s competent day-to-day, but who can’t be an expert in everything. This approach works well when both parties do some upfront work to understand each other and make sure some basic procedures are in place. Fortunately we’re starting to see more HR consulting operations offering this sort of support.

What’s “Good HR” and a “Good Boss?”

The biggest challenge for HR to work well in any organization is still the internal bosses. If they have a hard time accepting input or improving inflexible approaches to management, no amount of support, advice, coaching, counseling or whatever one offers, will help much. No HR manager, external or internal, can do a line manager’s job of leading and managing. Those who try are doomed to fail as surely as the managers they advise. Every leader, HR or line manager, will be most effective using a coaching-leadership style. Organizations need to develop a culture that emphasizes a coaching approach to solving problems and managing people, with everyone participating in coaching each other over time.

The secret of handling people effectively is to understand you cannot command them. You can lead. You can get their assistance by building their willing interest in doing better, but you have to approach them as individuals with their own styles who can be helped to do better not ordered, threatened, blatantly bribed or goaded into it.

An instructive read is the Monster.ca article on the 21 types of bosses, which you can read: HERE, with the great boss as #21 – a coach, a leader, a strategist, a support, an example, a motivator… in short, not a “boss” at all in any usual sense of giving orders, but someone in a role of helping employees become the best they can be while keeping a steady, positive environment operating smoothly. Is this someone who has miraculous, super-human powers? Not at all. I’ve seen thousands of highly effective bosses and, as you know, I believe and present the five basic keys that make this possible for anyone to achieve day-in, day-out.

“To succeed, actions must benefit both organization and individual in balance; deviate at your peril.” Dave Crisp