How to Avoid Human Resources Errors
Mar 6, 2018
Loren K. Allison

Successful small business owners find that as their businesses grow, they are not thinking long term. Many are happy to survive while others think that because they are small, they are largely immune from the problems big companies face. If you employ 500 or fewer employees, let’s look at some practical and cost effective measures to increase your odds of survival:

Inconsistency in the application of discipline is a serious problem and can cost you money. Two questions you must ask are: 1) what actions have we taken in the past under similar circumstances? and 2) are there circumstances that would justify departure from that practice? Employees discharged on a whim can file claims for being terminated without “just cause” with the Department of Workforce Development, for “discrimination” with the Metropolitan Human Relations Commission/Equal Employment Opportunity Commission, for an “unfair labor practice” with the National Labor Relation Board, or “retaliation” with the Department of Labor, and proceed to state/federal courts.

You need a list of offenses, generated with the assistance of your supervisors who will have an ownership interest in them, that will result in corrective action distributed in conjunction with your employee handbook and posted on appropriate bulletin boards. This Code of Conduct in your handbook demonstrates you are engaging in an objective analysis of a person’s job performance. Documentation is a key in deterring or defending litigation. A party who knows you have “written them up” may be less likely to challenge you if they know you have well reasoned documentation on them. 

Your employees are aware of the publicity surrounding sexual harassment and you, too, have a higher awareness of it. Have a special procedure for employees to complain about unwanted sexual advances. Documentation of such situations allows you to prove that a review and investigation took place, relevant employees were informed of the need to change their behavior and a warning of potential additional corrective action or termination was issued. “Voluntariness” is not a defense to a harassment charge – the question is whether the alleged sexual advances are “welcome” or not.

You should have an Operating Agreement between you and your partners which outlines the respective ownership interest of the “members,” the respective capital contributions of the members and how profits and losses are allocated. An Operating Agreement outlining such matters can give you peace of mind and resolve conflict in advance, i.e do you want your partner’s ex-spouse to be your uninvited partner?

Do not spread yourself too thin. Partner with an employment law attorney given the fact that many aspects of employment law are complex and out of the norm of general business counsel. Moreover, do not try to go it alone. Partner with payroll services, technology vendors and recruiting organizations, so you have the time and energy to manage and grow your business.

Your hard work has built a successful business. Be mindful of some of the most common mistakes small businesses make and take action to prevent them!  

Phone: (260) 466-5205


IMG Insurance Management Group

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