You may get reminded every day, as I am, that you are not twenty anymore. Especially now that both my guys are in their twenties. It's hard to take when things that you thought were so cool just aren't now. As a field HR is no worse than say, law, or accounting, when it comes to not keeping up, but that's like saying big hair is no less cool than spandex.

Take compensation, for example. Most small businesses have adopted religiously the concepts of salary grids, annual salary reviews, across the board per cent salary increases, a bonus for everyone at Christmas and the same benefits plan for everyone in the company. These concepts were created by accountants and compensation people (same thing but with smaller offices) inside big companies who were interested in keeping things simple, consistent (a term favoured by accountants and HR people) and out of the courts. If you have been reading the HR magazines (yikes, very uncool) or websites you'll know that these systems don't work that well in big companies and they can be disastrous in small companies.

So, stop thinking like an HR Neanderthal, and try to catch up with the times. You may have people working for your small company who live in other parts of the world, let alone the country. If you try to set salary levels based on what the market will bear in your part of town, which is the old concept of market surveys, you will communicate quickly to the very savvy global work place that you are stuck in the 1970's. There goes your talent. Same thing for annual salary reviews and increases for everyone. The sound you hear is your key talent twittering away - if you have to ask what that is you really need more help than I can offer.

Pay for talent, show people you know what it takes to live in their community with your base salaries, but put more emphasis on delivery of results (more revenue, less cost - keep it simple). Only increase someone's base salary when they have increased their value to the company through completing more training or completing important stages in their career plan with your company. Find out what your people want and give it to them! What a concept. My clients often complain their people don't want more money, they want more time off. Then they complain that they can't hire new people to replace their quickly aging experts because they don't have the vacancies. Give your experienced workers more time off if they agree to help train their replacement - try it, it works.

Small business people, stay away from corporate HR thinking, it is your competitive advantage

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Comment by Kim Bechtel on February 23, 2010 at 6:05pm
The Fat Boy and me, therein lies a tale! Thanks for the comment, I just raised branding with one of my clients today. We lost a couple of clients due to 'rumours' about the company, unfortunate result of downsizing during recession. Let's build an HR profession that champions productivity through effective people practices.
Comment by Corey Harlock on February 24, 2010 at 10:11am
Love it Kim, great job and good ideas. I totally agree with benchmarking performance of an employee against that employees performance and not that of the top performers and then assessing and rewarding compensation based on thier own performance within th company. Reward you progressing and growing talent and give the maintainers what they need to stay and be happy.

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