Business Basics: HR for small business

We also urge everyone to please ask questions about any of the content featured here today So that the webinar can flow smoothly, we stick to the time allocated We prefer to answer these questions at the end And please free to ask any of the questions as they occur through to you Just so we can test this function, can everyone please click the little blue hand icon just so we can make sure that the question function’s working? Thank you, Angelique Thank you, Christine Thank you, Mathew Thank you Melanie Great, it looks like it’s all working We also have some handouts for you which you can access and download by clicking on this section here Mark has kindly agreed to share his slide deck with us, which have been specifically prepared to better understand today’s content Please remember to download these handouts before you exit the webinar as they will not be available after the webinar is over During the presentation we will have the opportunity to engage with a few questions posed by our presenter Click on the selection to submit a response to the poll questions so that Mark can better understand your needs So now it’s time to bring on our presenter Mark’s passion is making performance management work With over 17 years’ worth of experience, Mark knows that at least 8% of your budget goes into trying to manage poor performance Over the course of his career, Mark has helped businesses reduce the time, effort and cost human resource activities take by creating and implementing new HR strategies based on real world experience in dealing with people He’s dedicated to helping both employers and employees maximize their output and ensure great performance is a result of a great work environment with great processes So, Mark, welcome to the webinar Thank you, John, and good afternoon to everyone for taking the time to listen to my ideas Just a small introduction on myself I’ve been in HR all my life in both government, private sector and not-for-profit, as well as since 2003 running my own small businesses John so kindly introduced me with And, yes, our passion is that many of the problems that are associated with managing people are far too complicated and don’t need to be there So today I’d like to cover six things I’d like to just define HR so we all agree with what we’re talking about Talk about some myths around HR Talk about processes as widgets, and I’ll come back to that Also a concept that we use strongly called the 2% Effect I want to point out two practices as examples of what I’d like you to avoid

And finally, leave something positive and leave you with a bit of a plan and an overview, cause John did manage strategy So I’d like to leave you with a bit of a strategy as to how you might avoid many of the mistakes that occur in my profession Just to get started, I’m going to push back to John and ask him to run our first poll And it’s just to give me an idea of the audience and where you’re coming from So, John, could you take over and run that first poll, please? No worries at all, Mark So now, ladies and gentlemen, please feel free to select the option that suits your business and answers the question Wonderful Thank you so much, ladies and gentlemen There’s room for ten more seconds I think we’ve nearly got 100% so if you haven’t decided now, book it in quick Three, two, one Awesome So, Mark, it looks like less than … So how many employees? Less than 15 is about 65% of the room And everyone else is about between 15 and 50 I think it’s- That’s the one, a real- Yeah Yeah, I appreciate that, everybody Thank you very much It just allows me to tailor my presentation to that audience Now, there’s a second poll that will also assist me And, John, if I could ask you to run that second poll now, please Absolutely So just like last time, ladies and gentlemen, select the one that best suits you Oh, a bit more of a mixed bag on this one There are 10 more seconds, like last time Anyone who hasn’t voted, get your votes in quick Two, one Lovely So it seems to be the most important HR issue is finding good people And with a follow-up, and very closely, with leadership and morale as a follow-up on those Excellent Now, thank you, John, and thank you everyone for that I’ll certainly be trying to talk specifically to those issues as we go through Allow me, though, first to start with something that I’ve learnt to do when I talk to people What is human resource management? And the key thing is it is an activity, it’s a function It’s the same as marketing, accounting, production, distribution, warehousing It’s a function And although it’s about people, I think it’s very, very important to realize it’s about a function Now, even the majority of this audience has only a handful of staff You will still have to do all of the things that are listed on this screen So on the left-hand side in blue, we have what I might call the more positive parts of the HR function Somebody has to do it in your organization How you do it is the issue, the process, but it has to be done The list on the right-hand side of the screen, the red list, are clearly some of the things that are generally not so nice to do But equally they also have to be done And if we’re going to talk about morale and leadership, it is the combination of those two lists that’s important And it is not the policy that you have, per se, but I will strongly emphasize today it’s the way you go about all of those activities that will have the biggest impact on morale and leadership The elephant in the room, it’s a nice picture I found somewhere, is that a lot of the HR processes, particularly in bigger business, and this is a lesson I’d like to share with you today When HR becomes a department or a function in its own right and you put on a dedicated person, please understand that a lot of that person’s time is about compliance It’s not about the more positive side of things Very often it’s not about building teams

So you’ve got to be very careful with the HR support that you get in your businesses to make sure that you don’t go down the rabbit hole of you need lots of policies because it’s a compliance based activity If you do that, you will end up making the same mistakes that I, many of my colleagues and certainly most businesses make And I’d like to share with you today some ways to avoid those So let’s look at the second activity that I said we’d mention The myths of HR The first myth actually is, and this is my professional body known as AHRI, the Australian Human Resources Institute, have on their website that one of the functions of a HR person is to advocate for the employee I totally disagree You people run businesses, you manage businesses Taking the views and points of view of people into account is important But none of us are there just to look after everybody and all their problems and everything else about their lives They are there to come to work and do a job And if you start to get people in my profession that start saying, well, we’re here for the people, you need to change this and this because the people are complaining, I don’t necessarily connect that with good morale or good leadership It is a distinction that we need to make, that HR is not there purely to advocate for the employees I argue we should be there to advocate for solving problems Point two AHRI also argue that my profession and many of my colleagues are supposed to think like business people and have finance and accounting skills Believe me, they don’t And I think that’s incumbent upon us to understand if we combine the idea of compliance with a business case, we need to put pressure on the HR people that are supporting your businesses to not only just say how is this going to, you know, reduce my risk (compliance), but is the cost worth it? Is there a smarter way to do it? Can we achieve the same outcome with a better process? Because I’m telling you, folks, most HR folk unfortunately don’t think like business people and don’t have financial and accounting skills The third myth really comes from our legal profession If any of you have had problems with staff over the years, and I’m sure some of you have, you’ve gone to a lawyer and they’ve said your policies weren’t robust enough So from the legal perspective, they argue that well drafted policies are the bedrock of successfully addressing people problems And successfully addressing people problems, as I will show you later on, has a direct connection between morale and leadership as well The problem is that is a myth You don’t necessarily need a wrath or a range or inches and inches, in the old language, of drafted policies That is not the test if things go pear-shaped The test when they go pear-shaped is how you manage the situation And I’ll share that with you a little later on And finally, the fourth myth about HR It’s supposed to be scientific, apparently The pointy head manager from Dilbert has a different view So here’s where I’d like a show of hands, please Who’s seen, heard or experienced situations that are displayed in the Dilbert cartoon? John, how do we see the results from the hands up, please? So that’ll be under the attendees So we seem to have one, two, only two people who have … Oh, three? Three people have experienced that kind of situation that Dilbert talks about, I think Yeah Excellent Thank you to John and thank you for the audience For those small number of people, you know, I empathize with you, I understand For the rest of you, the manager is not necessarily bad in the way that cartoon is portrayed The point I want to make is that the manager is making a judgment based on a range of factors including his personal experience And he’s also trying to mitigate his risk by creating a paper trail as he says in that caption So the challenge I want to put to you is that if anyone from HR land comes along and says that we’re scientific and we know what we’re doing, et cetera, that is not the key The key is about judging and managing risk based on a lot of data and a lot of personal

feeling And we need to make sure that we understand and accept that statement So the third point I wanted to mention to you was … I seem to have missed some slides Just bear with me for one tick I apologize for this Okay Sorry, I apologize I put my introduction out of order I’d like to now just talk about two HR processes that I’d like you to be well aware of and avoid like the plague because they don’t work For those of you who get big enough to have to start implementing some sort of staff feedback or performance review type process, this particular one is taken out of a textbook which we teach our university students As you can see, it’s 29 steps And 29 steps means … Or 29 decision points means 29 opportunities for someone to make a, quote unquote, mistake And, of course, if you make a mistake, that’s what lawyers and unions and people like that pick you up on So if I was to say to you I’ve got the world’s best practice performance management system, it’s going to improve morale, feedback to troops, demonstrate leadership If I was to put this in place, I would be a snake oil salesman and you should put me in jail ‘Cause it doesn’t work And the worst part about is, as you can see, there are five decision points where, if you get it wrong, you have to go back and start again I’ve had many people in government and corporate life tell me that that’s pretty much the way their performance management process works The trouble is it doesn’t work, everyone knows it doesn’t work and we need to come up with a different way of thinking about it And that’s what I want to share with you today, is the mistakes that big business have made Because as some of you grow into those larger organizations, my argument today is I want you to avoid what we know doesn’t work This is a second document that I find quite amusing It’s actually from Fair Work Australia It’s a government issued document you can download from the hyperlink at the bottom And it’s supposedly a fair dismissal code Now, my problem with this document is even though it’s giving you some guidance, the guidance is after the event So did you dismiss the person? Well, if you did and you ticked yes to question three, it’s too late And this is the second problem that we have with HR As well as putting in process to try to mitigate risk, we very often tell people after the event what they did wrong rather than help guide you before you make a decision, and hopefully get it right So a strong point I want to make today is be very, very careful about rushing in and taking some action, particularly if it’s around your people management stuff Because if you get it wrong, it’s too late It’s done And we need to learn how to manage the situation a little more proactively and avoid mistakes, rather than picking up the mess And I might just say before I move on that your staff, and I know this factually, staff are looking for leadership from their senior management and business owners They don’t like the people that don’t pull their weight They don’t like bad, clunky processes They don’t like menial jobs And they’re looking to you, the audience today, to show them a better way And if you can do that, that’s leadership and that’s an improvement in morale And that’s all you guys need to do, seriously So let me just give you one final warning before we go and move on to some good stuff If you are in a position where you need to put on a new HR person for the first time, and you start to hear these three questions coming out of that person, you’re in trouble Because very often, and I must confess I have done this, I have done this in a corporate life I am guilty I apologize The first thing that the HR person tends to do is say you need to develop that comprehensive policy and process manual And as I’ve already pointed out, I argue no you don’t

It’s an old-fashioned thinking It’s a thinking that doesn’t actually add value and it’s a thinking that causes more trouble The second thing that’ll come, generally after about two or three months, is that person runs around and writes all these policies and then they say we need to train everyone in them Particularly bullying, harassment, discrimination You know, we’re seeing a lot of that in the media at the moment And so the traditional solution is that bedrock of well written policy that we mentioned, which I call a myth Now we need to train everyone And the third thing that’ll happen to you as business owners and business managers is that your HR person will come back and say, look, I’m so busy I can’t get the job done I need an assistant So in my conversation about being proactive, I’m going to encourage you to think clearly about that list And if you’re going to recruit a new HR person, ask them those three questions What’s the first thing you’re going to do if you come in here? And if they say write you a comprehensive HR policy, I would be warning you not to employ that person If you accept them and then say, all right, well, what’s the second thing, and they say we need to train everyone, that gives me confirmation that you shouldn’t be employing that person Because if you do, within three to six months they’ll be coming and asking you for extra staff So, please, understand it’s not about the written policy that’s important As I’m going to demonstrate to you, the important thing is how you manage And if you manage properly, you’ll have better leadership and better morale No question So, sorry, that’s just the confirmation Don’t employ anyone in HR, myself included, consultants, full-timers, part-timers, if they’re going to just focus on writing your policies and train everyone in how to use policies It’s not where the value-add is Now, I want to sort of shift now to two models that we build our business on and we believe are the underpinning philosophies of creating really good HR process which can help lead to improved morale and improved leadership The first is by a chap named Ken Miller Ken lives in America and he wrote this book called We Don’t Make Widgets Now, the irony here is that Ken spends most of his professional life and making his money out of helping government understand that they do make widgets So allow me just to walk through the steps From Ken’s point of view, and I totally agree with him, everything we can do can be put into these steps, A, B, C and D. The factory is the physical place where something occurs Now, it doesn’t matter whether that’s making a pen, making a car, mixing some paints or whether it’s an office where the accountants are doing some work Or the office where the HR people are filling out forms and writing reports The factory is the place of work, if you like The widget is effectively the process Oh, sorry, the factory also is the place where the people are So it’s the place and the people The widget is how do they go about doing whatever it is they do? So if you’ve got a strategic planning session, the factory is probably the boardroom, the people are a range of people But how do you go about doing your strategic planning? What is your process? And you need to understand and articulate that Because as a result of that process, we deliver an outcome Again, back to my first example If I’m a factory making pens, the outcome is a pen If I’m a factory making cars, the outcome is a car If I’m an accountant, it might be end of months reporting If I’m an HR person trying to recruit new staff, the outcome is actually not new staff It’s a recommendation saying here are the people we’ve interviewed, here’s their resumes and here’s the recommendation So understanding that, what is the outcome, is something that I see doesn’t happen often enough And D is quite critical, and in the HR space often misunderstood The customer is not the ultimate customer who pays the bills In Ken Miller’s model, the customer is the person who gets and uses the outcome from the widgets as created by the people in the factory And what is really interesting to understand there is, as I just mentioned, the recruitment process, the outcome is a recommendation So that paperwork, that report, goes to a more senior manager or business owner to say

yes or no So the outcome is the recommendation, the customer is the manager If we think about performance management and poor performance for a tick, the interesting thing there is that the customer is not always just the owner or the manager It’s actually the lawyers And Ken’s very strong on this in his book If you think about it, just on the poor performance for those that have had the experience, if you deal with a difficult staff member and you terminate them and nothing happens, fantastic But if you do terminate them and it goes a bit pear-shaped, you’ll end up in court And therefore all your paperwork, brackets, that see the outcome, goes to the lawyers So if we haven’t factored that in, if we haven’t written our paperwork properly, if we haven’t delivered the outcome in the right format, it doesn’t help our case when we get to the lawyers So I really ask you to think about your business in those four steps The second factor that we talk about … Oh, sorry, I missed one question I’d like another hands up question, if I may? Can I ask you to hands up again if you agree that your processes should be thought of as widgets? Just yes or no, please Put your hands up They’re looking like about, yeah, 10 people in the room So just under half About half? That’s actually about Ken’s experience He says that you get a lot of people that understand this quickly, but he still argues that for those of you that don’t agree with me, he would argue that you need to think about it a bit further And I’ll just leave you with that to sort it out yourselves The second principle that we like to look at and consider is this, what we call the 2% Effect So the 2% Effect, as we define it, and you can see on the left-hand side it’s my colleague, Dianne, in collaboration with myself, that put this book together So the 2% Effect, as you can read, is that we tend to create rules for the small percentage of people who break the rules And that covers life Road rules are a really good example No? The prison system wouldn’t exist if that small percentage of people didn’t break the rules But I’ll ask you to look very closely at the unintended consequences Now, if the small percentage of people are always going to break the rules, then Di and I challenge you to say why do you need a comprehensive set of policies as distinct from a simple set of policies? Because they’re going to break the rules anyway And what do those complicated policies do? Unintended consequence number two, they get in the way And that is all the experience I have from corporate life and government And that’s what I’m going to ask you people to avoid Be smarter Come up with ways to get your policies down to simple rules rather than bureaucratic rules And I’d like to just quote Di, from the book Nothing is more distracting or more off-putting in business than people behaving badly Unfortunately, the 98% are generally too polite to say anything to these people However, they’re sitting there wishing you, their manager, would do something about them and they can’t understand why you don’t So if your concerns are around leadership and morale, again, your staff are looking to you for leadership and morale Second comment from Di’s book The poor behaviour of performers of the 2% also impact on the performer management of the rest of your organization Di’s experience, and I agree with her, tells us that the distraction caused by one of these 2%-ers can affect your productivity, of your good employees and you, by around about 20% So John mentioned a factor, a number of 8% earlier on, and that comes from a richness of costs And Di is also saying that one fifth or 20% of your wages bill is not being used effectively because of a very, very small percentage of people And we both believe that’s something that we need to address So let me give you two examples here Because they can both apply to small business as you’re growing, although they both come

out of corporate life The first is the use of credit cards A company that we worked with, their policy was quite literally use the credit cards, you know, reasonably, as if it was your own personal business and you were spending money on your own personal business It worked brilliantly for many years Unfortunately, two people, as the organization grew, two people spent some personal expenditure on their credit card It wasn’t actually a huge number The traditional approach happened The 2% Effect cut in The company introduced a whole bunch of complicated policies, took the credit cards off pretty much everybody, made you go and spend your own private money and claim it back The irony is they had a turnover of the good people, and one of the comments she made today was finding good people And the people that left were the good people The people that remained behind were the two people that broke the rule So my argument is that was a pretty dumb way to manage a small percentage of people who did the wrong thing We need to learn how to manage them, not create the bureaucracy The second one related to dress code or, you know, uniforms and what to wear in the workplace And it started with a new receptionist who was straight out of school Literally She was 18 And she came to work wearing a slightly shorter skirt than the organization, being fairly conventional and traditional, was used to And they approached me and said, oh, we need a dress policy And I say why? So they told me ’cause of the new receptionist I said, well, why don’t you talk to her? Well, we don’t have a policy that we can relate to I said yes you do I said your policy is dress appropriately And they went yeah, yeah, we know that But what’s appropriate? I said exactly You’re telling me that she’s not dressed appropriately but you’re not telling her she’s not dressed appropriately Oh, so what do we do? So I literally had to coach this manager on how to have a conversation with a young lady who was as excited as hell for getting her first job, and no-one had told her that she just needed to wear a slightly longer skirt Now, in this case we did help them with that conversation The lady was apologetic because she didn’t know any better They helped her sort of get a different wardrobe over the next, you know, month or two And nobody else got involved No-one else had to change anything And that is what we need to be doing more of So there’s just two examples that I hope you see what we’re talking about with the 2% Effect So my last hands up is can you please put your hand up if you agree with the 2% Effect as defined Yeah, looks like it’s a much more stronger showing I think nearly everyone agrees with that, the 2% Effect And again, as I experienced and mentioned with the experience with Ken, that a lot of people struggle a lit bit initially with the idea of a widget Ironically, we find 100%, maybe 98% ’cause there’s always a 2% somewhere, we find the vast majority of people understand this But my challenge to you people, my challenge to those that are listening today, is don’t fall for the 2% Effect Don’t stick in those complicated policies if someone does something wrong Learn how to manage the situation So we’re actually a little bit in front of time We’re getting towards the end of what I’d like to do with the presentation And when I put this slide up and call it best practice, I have to confess that I haven’t had, you know, five years of academic research and 40,000 reference papers to confirm it But what I am saying is my experience over the last 35 years, and how I’ve run my own HR consulting business, and the feedback we get back from our clients, says that this is best practice So I’m happy to be challenged I’m happy to be criticized But I’m also happy to debate whether or not this is best practice, ’cause I believe strongly it is So for those of you who want to improve morale and improve leadership, there are two key points Deal with your poor performers, and you all have one I have no doubt everyone listening to this has a 2%-er that’s giving them some grief You need to deal with them The second thing is that everyone else avoid the 2% Avoid putting in those problems and complicated policies

So let me just go back and tell you what I believe is the best practice process When we deal with poor performance, the issue is only one of managing risk And these are your high risk people Not so much for those of you with less than 15 people But once you start getting up over that and getting up to 50 and a hundred people, you end up with the opportunity of unfortunately being caught up with the legal system It’s in that situation that these people are your high risk ones But the acid test by the commission, by the lawyers, by the judges, is did you take reasonable management action in a reasonable way? That is the test And when I see regularly when people fail that test I’ve even had an industrial relations, a Fair Work commissioner tell me I can’t remember the organization he referenced, but I probably shouldn’t say it anyway But he said they came along and argued that they followed their process And the commissioner said your process is crap Go back and do it again So we need to understand that it’s not a matter of compliance and following and ticking the boxes It’s a matter of learning how to manage Very different The second point that I have found very, very successful for the last 20 years of my career is when you have someone that comes along and says anything that was on that red list I showed you before, poor performance, discipline, harassment, bullying, victimization, whatever it is, don’t go there Don’t go down that path Have a look at what that behaviour is doing in terms of a management problem And identify that management problem and solve it So, for example, let’s just say someone is habitually late Now, they might be coming in, you know, 10 minutes late one day, an hour late the next day Absenteeism might be higher than normal, et cetera, et cetera The traditional model is that we go and talk to those people and say why are you late? Don’t be late again And if you’ve had that experience, it probably didn’t do … sorry, for a 2%-er it didn’t solve the problem But if you turn around and say, listen, when you’re late you cause me this problem I can’t allocate the work I’ve got to get an extra causal in That just cost me four hours because you were half an hour late Focus on the management problem and then engage the person in the conversation to say help me solve that problem Now, on 100% of occasions when we’ve used that approach, two things happen One is that if we ever go to court it’s always deemed reasonable, and two, when we solve that problem, irrespective of whether the employee turns around and stops being a pain or whether they exit, someone else in your organization will come to you, after you’ve had that conversation and solved the problem, and thank you And they will say we’ve been waiting for you to deal with that problem That is a guarantee I’ve yet to have a manager not have that happen So these people in your organization know who are the 2%-ers And partly, in my own opinion or experience, the reason that morale is sometimes a problem is because these people are not being dealt with And they are looking to you, this audience, to deal with them Now, once we can put those people aside, once we can manage them reasonably, my best advice for you for the rest of it in terms of morale, development, et cetera, is pretty much get out of the way and let your people get on with the job Keep your processes simple Go back and pick up on Ken’s idea How do we go about doing our work? Can we do it more effectively? Can we cut out some of the steps without dropping the quality? It’s amazing how much value you can achieve for your business and for your people if you keep it simple Secondly, don’t manage to a compliance Don’t manage to a list of policies or that checklist that we saw before Manage to your values If your values are be honest and someone’s not honest, have the conversation If your values are top quality first time, no repeat work, manage to those values That’s what it’s all about And that leads directly into the third thing It’s about the culture The culture is the way you run your business

As many of my friends say, culture is not a complicated concept It’s purely the way we do things around here So if you demand high quality of work out of your staff but you’re a little bit slack, they will see that as incongruent and their morale will drop You need to walk the walk and talk the talk And it’s not about the paperwork and the forms Those paperwork and those forms are actually part of a process for the lawyers when it goes pear-shaped So I want to finish, and we’re, you know, a little early But does this work? Because I’ve certainly been making some claims and sharing them with you And I’d like to know I leave with you with some other people that we’ve worked with over the years about this idea of manage your 2%-ers and streamline your processes And here are the feedback that we’re getting Now, the industries that they’re coming from are education, mining in Africa, academia and Colette from childcare The reason that we’ve used those examples, and I’m going to finish here and then ask for any questions, is because when you’re managing people the issues are about the same, irrespective of your industry There are nuances but they’re basically the same And if you are going to learn a lesson from today, I ask for you to learn the lesson that HR has grown up to become a little bit of a bureaucratic monster And it’s because of, I would argue, we don’t understand Ken’s model of widgets and so we create complicated processes and we tend to fall badly into the 2% Effect which you all said you understood and agreed with So if you can avoid the 2% Effect and you can look at streamlining your processes and keeping it simple, you will very quickly have a measurable increase in morale and a recognition of the leadership that you’re offering your organizations So I’m going to thank you all for your time and for listening, and I’m going to hand back to John and ask are there any questions that need to be answered? Champion Thank you so much for that, Mark As I’ve been delivering workshops across Queensland, it seems to me that HR has been the contentious and highly requested issue that is really poorly understood and more poorly executed So to have that kind of insight into your wealth of experience is really appreciated As you’ve mentioned, we do have some questions I will encourage all of our attendees, if you do have any questions for Mark please type them in We will address all or as many as we can before one o’clock We do have a few to start off with So we’ve got one here from Travis who says how can I ensure I always take reasonable management action in a reasonable way? Thank you, Travis I should have covered that I apologize There’s a very simple test I use and it’s kept me out of trouble and kept the people I refer to out of trouble for many years And it goes like this You’ve identified you have to have a difficult conversation with someone Now, before you have that conversation I would ask you to think of the following Write down your conversation, write down your notes Get prepared and then ask yourself if this happened to me, if it was my boss having the conversation to me, would I think it’s reasonable? And then I want you to do step two I want you to say, well, if it’s not quite reasonable, what might a lawyer think in six months’ time? Now, if you can pass those two tests, Travis, that’s pretty much the best advice I can give you for what’s reasonable, managed in a reasonable way It’s not rocket science Thank you No worries Yeah, Tallison here would like to ask, you said I shouldn’t get a policy writer or I shouldn’t employ a policy writer But don’t I need these policies when the lawyers get involved? Tallison, the answer is you need a policy So let me give you a really good example If I turn around to someone and say you big, fat, black, horrible, useless, lazy person,

is that, A, discrimination, B, harassment, C, victimization, or D, performance management? In other words, I didn’t really say it very clearly And, of course, it wasn’t reasonable, And, of course, the lawyers will find an argument So I argue very strongly and I’m happy through John or whatever format we use to provide I would argue that for most small businesses, you can run your organization’s people management on the following documents And please write these down You clearly need some sort of job description All right? One page does most people Two, you need some sort of employment contract Again, a one pager, depending on your organization, may be acceptable Three, you need some sort of code of conduct Now, I’ve mentioned run your organization by values and culture A code of conduct is a set of rules If you have a Christian upbringing it’s the 10 Commandments, right? It’s a set of rules I find the Catholic thing with the 10 Commandments a classic because we have a set of rules, then we have a Bible that’s about a thousand pages long Why don’t we just follow the first set of 10 rules? All right, the code of conduct Very simple The next one, and I’m happy to share the next two with people, is what we call a governance policy Which basically says if there’s a problem, here’s the steps that we’ll use to manage it And the last document is a governance review policy which basically just says if someone’s not happy with the way we managed it, here’s a second step that we’ll put in place to get an independent view 20 years of experience tells me pretty much that’s all you need to manage your people in your organization Full stop So, Tallison, I’m happy to talk about that one-on-one later, through John or whatever But to the audience, keep it simple Governance policy and a governance review policy is about all you need Champion Mathew would like to know what happens if the 2% requires action? However, the business owners are those who want the micromanagement and not the HR advisor/manager How do I manage to get the message across to the owner about the impact the overheads of policies would have on the circumstance? Wow Mathew, there’s a lot in that but I’ll try to keep the answer simple You are quite right in saying that the problem is you need to convince your boss or the business owner I respect that totally And I’ll be adamant and black and white and very simple You cannot take action until you have that person onside HR for Small Business OSB Webinar 27th November 2017 Page 14 of 17 So your frustration will not be solved until you can get the owner onboard Now, the best answer I can give you to get them onboard, and once again I’m happy to share this document with people, is effectively you need to do a business case Again, that’s the management problem So, hey, Mr or Mrs Business Owner, when this is happening over here in the corner, we’re doubling our costs We’re taking four hours too long to get a two minute job done You’ve got to put some numbers around it and, as I said upfront, one of the myths of HR is that they’re good at numbers They’re not So a classic I can give you, Mathew, is an organization that was having … They had a really difficult 2%-er And the work just was not getting done So they went and hired a contractor So all of a sudden the organization is paying for this person to run around and cause havoc while they pay the same amount of money to a contractor to do the job That was the business case for getting change So I hope that helps you and guides you Next one, Simon would like to ask, you mentioned earlier when referring to the widget way of thinking that under outcomes, the outcome of firing someone was the paperwork for the lawyers How do you balance having the right paperwork if things go badly without going down the checklist, procedure and all? Simon, there’s a form on my website you can download for nothing If you can’t find it, let me know Basically, the format that anyone can find on our website, download it It’s under the resources tab It’s called the Management Action Plan And to pick up on the answer to Mathew’s comment, that Management Action Plan is effectively the only paperwork we have needed for 20 years to resolve a 2% issue And if it’s ended in termination, that particular format, following it properly, has led to

a 100% success rate in defending any claim of unfair dismissal I might leave it there, John And, again, if Simon wants to pick that up outside of this forum, we can happily do that Sounds like a good thing Peter would like to follow up by asking, one recommendation I was given as a manager is that employees model their behaviour on their manager and other managers supervising Have you an observation on this? I have, Peter I’d probably disagree slightly I will say emphatically and factually by research, ’cause I’ve done the research, the most important relationship in any organization is the immediate relationship between an employee and the first line manager So to some extent, yes, you need to model that relationship and that behaviour If I had another hands up, which I don’t, but if I asked the audience how many of you have left a job because you didn’t like your boss, I’d say it’d be very close to HR for Small Business OSB Webinar 27th November 2017 Page 15 of 17 90 to 100 percent So, Peter, the issue to me is yes, you need to model your behaviour, but it’s not a global thing You know, you can have good managers and bad managers and good people and bad people The other comment I’d make, ’cause it relates to Peter’s comment, is that I would argue that pretty much every 2%-er you have in your organizations right now, they are actually not poor performers And what I mean by that is they are capable of doing their job I would argue they’re probably disengaged I would argue that you need, and again back to the widget model, if you’re trying to manage poor performance but actually the problem is they’re disengaged, then by definition you’re in the wrong game So we need to be very, very clear about … I’m sorry I’m going round in circles a bit, Peter, but we need to be clear about how we’re going about the process much more than, you know, did we tick the box or does that person like us? I might have waffled a little bit on that answer and I apologize if I have, but I’ve tried to do it the best I can Just another one here from Liam I’m trying to distill this out Based on your talk, it appears that HR seems to be more an action of culture more than policy Does HR exist to protect employees or the company? Liam, thank you very much for the question It’s actually a really critical question that big business and my profession debate regularly And I have an adamant, and I’ve put it up already as one of the myths, HR people are paid by the organization Now, that doesn’t mean they should always say the organization is right But it equally doesn’t mean that they should always say the organization is wrong So, again, if we understand the 2%-ers, and you’ve all said you do, then those people are the ones with the loud mouths, the squeaky doors, all those clichés And the culture that they bring to the organization is nothing less than toxic And by the way, I was a 2%-er for two years And quite proud of it I used to go to work thinking up ways to annoy my boss And I was good at it So the culture that I brought in as a 2% was totally against the culture of the organization So HR is not just culture and it’s not just policy But it should be there to help solve problems for the business And I know, again, that’s not a black and white neat answer, as I was not able to give Peter But the problem is, if HR come in thinking they’re about looking after the employees and writing policy documents, then you’ve got the wrong people doing the wrong job Excellent One more question here from Marisha How do I quantify the impact poor performance and all-round poor human resource management has on my business? Marisha, that’s a really easy one if you get your head around it properly So please write this down One, start to look at the time that the 2%-er is not doing their job It’ll be a percentage Probably somewhere between about 20 and 50 Two, have a look at the amount of the manager’s time spent dealing with that person and the associated problems that person brings Again, I would suggest it’s about 30% of their day

So all of a sudden we’ve got 20% of one guy, 30% of another guy Three, have a look at all the other people that are doing extra work and all the workarounds because the 2%-er is not doing their job properly When you add up those three numbers, I suspect you’ll come to about the cost of one salary, one person’s salary So you can go to your boss or whoever else you want and go here is the problem You know, Mary’s not doing her job properly She’s doing these things and the cost is we’re spending 30, 40, 50 grand a year for nothing That will get people’s attention Excellent One last question here If you say … Sorry, this is from Sam If you say well drafted policies are not the answer, what are? When I say that, Sam, the well drafted policies I’m referring to are what the legal people would say you need A policy on discrimination, a policy on harassment, a policy on this, a policy on that You know, a credit card policy, a dress code policy As I’ve articulated through this presentation, the key is did you manage reasonably, in a reasonable way, for whatever the reason was? And once again, if you go back to the form and the template on our website, it gives you the format to work your way through, find the appropriate documentation, have the conversation and document it properly in the way that the lawyers say that was reasonable So you need to keep all of those policy settings really, really simple Again back to code of conduct and a simple governance policy is, in my opinion and experience, all you need Excellent All right, it looks like we’ll leave that there Okay, everyone, thank you so much for attending the webinar today Thank you, Mark, for donating your time providing your insight into the quagmire that is human resource management Remember to please download the handouts before you exit This webinar is being recorded and will be uploaded to the Impact Innovation Group YouTube page should you wish to view it again You will receive an email with information about the Office of Small Business programs, along with a short survey that will allow us to tailor these webinars to meet your interest and needs This will be our last webinar for this year going forward by the Office of Small Business But again, thank you so much for tuning in and have a great day, everyone And can I also thank everyone for listening in and for your interest and your questions as well Very much appreciated Thank you Thank you so much, Mark All right, have a great day, everyone