I usually answer with an analogy -- it doesn't matter how beautiful a building's architecture is or how efficient its heating and cooling system is or how wired it is if the foundation is weak. Without a strong foundation, a building will crumble.
The same is true in building a business. A business's foundation is built upon its people. You can purchase the best equipment and the most advanced computers, but if you don't have the right people to operate them, you don't have a business. You have a failure.
Human resource management allows you to find and keep the right people, and provides the strongest foundation for success. Sure, I'd like my workers to be happy for altruistic reasons, but it's also in my best business interest to keep them happy through good management techniques.
If your workers are happy with their jobs, they are more productive. With happy employees comes lower turnover and lower costs for health insurance and workers' compensation because, generally, happy employees are healthy employees with good safety records.
Conversely, unhappy employees tend to get sick more often due to stress, their productivity declines, and when on the job, they can wreak havoc. Stressed employees become distracted and may injure themselves, and angry employees may resort to destructive strategies, damaging equipment and customer relations.
Clearly, it pays to keep your workers happy, and good human resources management does that.
One element in the foundation of good human resource management is a detailed, understandable employee handbook. But the policies in the handbook must be applied equally. Employees will recognize the arbitrary application of policies as unfair treatment, leading to lowered workplace morale. To ensure consistent application, we aggressively train our managers and supervisors on our employee handbook.
Another element is a good health plan. I've consulted with small business owners who felt they should just buy the cheapest plan. They weren't looking at the bigger picture, though. Employees with few or no health benefits don't receive adequate preventive health care, leading to increased absenteeism and decreased productivity. People who go to work sick are more likely to have accidents, increasing workers' compensation claims.
Finally, good communication is important in a strong foundation. We once consulted with a small business owner who believed two of his best employees must be having personal problems that had caused a decline in their performance.
It turned out the two had been covering for a third employee's poor performance for months. With resources stretched thin, and with a manager who harangued rather than communicated, they began to experience stress and deteriorating morale, which led to their poor job performance. If the manager had made the effort to determine the causes behind this case, the situation would not have reached crisis proportions.
Most unpleasant workplace situations can be resolved through good communication. It's dangerous to build a house on a weak foundation, and it's advantageous in so many ways to build a business with good human resource management techniques. Rich Shearrow is president of Employer Advantage, a central Ohio-based Professional Employer Organization that specializes in managing human resources and employer risk for companies in a wide range of industries. He can be reached at (614) 923-9331 or firstname.lastname@example.org.