One of the best ways to become a great manager is to follow the example of another great manager. Adapting a "best practices" approach to managing your employees may be one of the best ways to excel in your market or industry.
By studying what the top 10 percent of U.S. companies have in common, researchers have identified five HR practices these companies consistently use that make them successful. And each process, system or approach is a practice your company can easily adapt.
Before implementing these best practices, however, it's important to realize that for them to bear fruit, they must be rooted in a nurturing environment. This fertile soil, as we might call it, that is shared by the top companies is a "getting better" agenda that recognizes the value of their employees to their success equation. They realize that the key to growing a successful business is not in markets, technology or opportunity but in their ability to attract, select, develop and retain the right people--and they base their actions on that knowledge. They recognize that leadership style--the way managers motivate employees, make decisions, gather and use information, manage change initiatives and handle crises--influences a business's climate and can account for nearly one-third of their company's financial performance.
If you've got the right environment, let's get started planting the right seeds.
Five HR Practices Shared by the Best
Recent studies indicate that the following five specific HR practices are used by the most successful companies:
- Selecting the best talent and putting it in the right place in a company
- Setting and aligning individual work goals with company objectives
- Building trust and instilling loyalty
- Coaching for results
- Using influence, not power, to get the results you want
Implementing these practices in your company is important to your success, but understand that your leadership style also can affect your desired outcome. You may not be surprised to learn that when it comes to leadership, there's no "one size fits all" approach. The good news is that as a business owner, you can fine-tune your leadership skills by using whichever of the following six basic leadership styles maximizes your effectiveness at the time.
- The coercive style. Used by military men and mothers of rebellious two-year-olds everywhere, this style is perhaps best described as "Do what I say, not what I do, and do it now." In the business world, this is not a style that generally lends itself to building relationships and accomplishing long-term goals. Unfortunately, you might be surprised at how often it's used instead of more effective styles. Use it sparingly, if ever.
- The authoritative style. Used when you want to persuade others rather than order them, this style effectively says, "Come with me." It's directive and confident, as good leaders should be, but it's also considerate, as with managers who provide subordinates with explanatory insights about their instructions.
- The affiliative, or servant leadership style. Also known as "People come first," this leadership style was best exemplified by Sam Walton, who drove the same pickup truck for 30 years and spent time with employees--from greeters to managers--when he visited his empire of Wal-Mart stores.
- The democratic style. This style aims to obtain consensus, or at least a strong feeling among your employees that they have a voice in decision-making. If you help an employee feel their input is as valuable to the company as their output, you'll have taken a significant step toward maximizing their productivity.
- The pacesetting style. With this approach, you set high performance standards for yourself and encourage your employees to do the same. Unlike the coercive style, this approach says effectively, "Do as I do."
- The coaching style. In this mode, the manager focuses on personal development rather than immediate tasks in order to develop consistently high performers.
There are also times when you might want to combine several of these styles, such as pacesetting with coaching to achieve desired goals, or pacesetting with servant leadership to demonstrate the value you place on people.
Observations about HR best practices gleaned from researchers appear to reach the same or very similar conclusions: that you need to focus on people and their potential rather than products and processes if you're going to create a successful company. The best good is that using the insights I've described above can produce excellent outcomes, not just uniform behaviors. And that's a great way to improve performance in any organization.
Paul Sarvadi is the "Human Resources" coach at Entrepreneur.comand is chairman of the board, CEO and co-founder of Administaff,one of the nation's leading Professional Employer Organizations (PEO), which serves as an outsourced full-service human resources department for small and medium-sized businesses throughout the United States.