Group Activities

TUTORIAL 18

GROUP ACTIVITIES

1. Form teams of five or six persons, each with at least one person who owns or has worked for a small business. Based on their experiences, make a list of the “inadequate-HR risks” the business endured, in terms of competitive disadvantage, lack of specialized HR expertise, workplace litigation, compensation laws compliance, and paperwork/data-entry errors. Lack of effective and sophisticated recruitment strategies, additional legal issues due to lack of HR expertise, lack of training which may lead to employment discrimination or sexual harassment claims, small business may not comply with complex regulations and laws, lack of an HRIS system may lead to more timely processing of data as well as more manual errors. (LO 18.1; AACSB: Analytic Skills)

2. You own a small business, and you are confused about which of your employees is eligible for overtime pay. The employees in question include your secretary, two accounting clerks, one engineer, and two inside salespeople. Individually or in groups of four or five students, use the DOL’s Overtime Security Advisor and DOL’s Calculator to determine who gets overtime pay. The secretary and two accounting clerks should be classified as non-exempt, and the engineer and two inside salespeople should be classified as exempt. (LO 18.2; AACSB: Analytic Skills)

DISCUSSION QUESTIONS

1. How and why is HR in small businesses different than that in large firms? Human resource management activities tend to be more informal in smaller firms. For example, one study analyzed training practices in about 900 family and non- family small companies. Training tended to be informal, with an emphasis, for instance, on methods like coworker and supervisor on-the-job training. Such informality isn’t just due to lack of expertise and resources; it is also partly a matter of survival. Entrepreneurs must be able to react quickly to changes in competitive conditions. (LO 18.1; AACSB: Reflective Thinking Skills)

2. Explain why HRM is important to small businesses. Small firms need all the advantages they can obtain, and for them effective human resource management is a competitive necessity. Small firms that have effective HR practices do better than those with less effective practices. For many smaller firms, effective human resource management is also a condition for getting and keeping big customers. This means that even small businesses must attend to their human resource processes. (LO 18.1; AACSB: Reflective Thinking Skills)

3. Explain and give at least four examples of how entrepreneurs can use Internet and government tools to support the HR effort. Small business owners spend much of their time tackling legal issues. These small business owners can quickly find answers to many such questions online at the following: The Department of Labor or DOL.gov, the EEOC or EEOC.gov, the Occupational Safety and Health Administration or OSHA.gov, and the Society of Human Resource Management or SHRM.org. (LO 18.3; AACSB: Reflective Thinking Skills)

4. Explain and give at least five examples of ways entrepreneurs can use small size—familiarity, flexibility, and informality—to improve their HR process. Small businesses need to capitalize on their strengths, so in dealing with employees they should capitalize on their smallness. Smallness should translate into personal familiarity with each employee’s strengths, needs, and family situation. And it should translate into the luxury of being able to be relatively flexible and informal in the human resource management policies and practices the company follows. (LO 18.1; AACSB: Reflective Thinking Skills)

5. Discuss what you would do to find, retain, and deal with a professional employer organization on an on-going basis. Small business managers need to choose and manage the PEO relationship carefully. Some suggestions are as follows:  Conduct a needs analysis  Review the services of the PEO  Determine if the PEO is accredited  Review the service agreement  Check out the prospective PEO’s staff  Ask how will the firm deliver the service (LO 18.4; AACSB: Reflective Thinking Skills)

6. Describe with examples how you would create a startup, paper- based human resource system for a new small business. Very small employers will probably start with a manual human resource management system. From a practical point of view, this generally means obtaining and organizing a set of standardized personnel forms covering each important aspect of the HR recruitment, selection, training, appraisal, compensation, and safety process, as well as some means for organizing all this information for each of your employees. (LO 18.5; AACSB: Analytic Skills)