For any creative business its brand will be integral to its success. Indeed, one previous author for the Knowledge Bank suggested that your brand defines you. But what about the talent that creates that brand? Is that not equally fundamental to the potential success (or otherwise) of a business? How often do we analyse the human makeup of that business to ensure all of its constituent parts work together, have the hunger to succeed and, perhaps most importantly, the inherent ability to produce high quality results.
Managing people in any entrepreneurial and cutting edge environment takes more than just employment law compliance. It is not even about best practice – i.e. constructing robust policies which, when implemented consistently, regulate the way employees conduct themselves. It’s about creating an environment where employees feel truly valued and, if results follow, so too will the rewards.
So what kind of ingredients do we need to create the recipe for a strong and loyal workforce?
Create the platform – any form of incentive or retention tool has to be built on solid foundations. This means developing contractual terms which are clear and easy to understand and provided to employees in a format which helps drive levels of engagement. All too often, employers feel they have to follow a prescribed formula when actually, provided that the core terms of S.1 Employment Rights Act 1996 are covered, you can be as creative as you like. What is key is demonstrating logic and uniformity with the terms that are imposed.
Build your culture – just as a business grows and evolves commercially so too do the dynamics of its workforce and it is crucial for the infrastructure to change shape accordingly. So, play devil’s advocate with how you do things, consider more flexible arrangements for employees and create living policies which ‘match’ the ethos of the organisation. Doing so will have a direct impact on employee motivation.
Accountability – it is well known that the hardest aspect of people management is tackling performance issues and improving standards. Why? Put simply, no one wants to have a difficult conversation when they could instead leave it for a rainy day; (even though there is a direct correlation between good active performance management and the quality of work product that results). Having a meaningful appraisal system in place will not only give employees a voice but, also, will help galvanize their appetite for achieving excellence in what they do.
Recognition and reward – increasingly, employers are moving away from traditional commission and bonus arrangements and towards offering shares or, alternatively, the option to share in the profits of the business. Creating parameters for a vibrant and realistic incentive scheme really will help a business to cultivate its top performers and engender loyalty.
There are no hard and fast rules for how these are papered or what aspect of the performance should be rewarded. Provided the documentation speaks clearly to the status of the scheme and employees understand bonuses are not theirs by right but through super performance, the business has free reign to decide how to reward and recognise staff. There can also be direct commercial benefits to such schemes: some carry attractive tax reliefs (Enterprise Management Incentive schemes being one), while others sit outside the employment relationship and arguably have the ability to bind employees to a business more powerfully than any rule or procedure could achieve.
Carrot and stick – not so much a stick as such, but going hand in glove with a creative HR strategy is the need to protect (developed and nurtured) talent from the hands of hovering competitors and, in some cases, other employees. Devising a set of carefully drawn and tailored restrictive covenants can ensure that employees understand their real value within the business. But if communicated effectively, they can also educate employees on the need for their paymasters to prevent the leakage of confidential information, intellectual property or personnel, which all too often have a detrimental effect on both parties to the employment relationship.
These provisions are notoriously difficult to get right, principally because they are interpreted by reference to when they were entered into rather than when the employment relationship terminates. Unfortunately, it is an area that most employers fail to address on an ongoing basis which can be problematic if the business is growing at pace. Another common pitfall is that employers assume one-size-fits-all when it comes to ‘non competes’ and other similar constructs which is rarely borne out in practice. Ultimately, safeguarding the exit of key talent is another hugely important consideration for a business that commonly empowers its employees to make bold and decisive decisions on its behalf.
Of course, there is much more to HR than accrued holiday and disciplinary procedures. UK employment law has developed incredibly fast over the last 20 years, so for any organisation dipping their toe in the world of recruitment, there will be associated risks. However, with care taken and time invested to create a positive and cohesive working environment, it’s not rocket science either that the resulting workforce will possess more strength, artistry and durability than any brand can offer.
Partner and Head of Employment
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