Chapter 13
Managing Human Resources
Importance of Human Resources

Human Resources – the people who work for a business.

Human Resource Management – ensures that needed
employees are available, that they are productive, paid, and
satisfied with their work.
Categorizing Human Resources
Staffing is a vital part of human resource management.
Once a person is hired, the salary must be paid
whether the company is profitable or not.
Permanent Employee – one to whom the company
makes a long-term commitment.
Temporary Employee -- one hired for a specific time
or to complete a specific assignment.
Full-time Employee – regularly works a schedule of 30
hours or more a week.
Part-time Employee – works less time than a full-time
employee by working either fewer hours each day or
fewer days each week.
Determining Employee Qualifications
 Goal is to hire people with skills that benefit
the company but are not available from
current employees.
 2 Parts of Work Requirements in
Preparation for Hiring New Workers:
1.
2.
The current work of the business should be
reviewed.
Any new activities planned for the business
should be considered.
Locating New Employees
 Sources of Applicants for Small Businesses:
 Business Teachers at high schools and colleges.
 Career Placement Offices
 By Recommendation of current employees
 Classified ads
 Online Jobsites
 Clubs and social organizations
 Customers
Hiring A New Employees

Care should be taken to determine if the applicant is
qualified for the job. (page 174, Figure 13-2)




Business and technical knowledge and skills
Communications and interpersonal skills
Attitude toward work and customers
Work experience
Compensation and Benefits
 Compensation – the amount of money
paid to an employee for work performed.

2 parts –


Salary and wages
Benefits
Salary and wages – direct payment to an
employee for work completed.
 Benefits – compensation in forms other than
direct payment, i.e. insurance, vacations,
paid parking, etc.

Salary and Wages
Time wage – pays the employee a
specific amount of money for each
hour worked.
Straight salary – pays a specific
amount of money for each week or
month work.
Financial Incentives
 Commission – a percentage of sales that an
employee receives.
 Piece Rate – pay for performance. An
employee receives a specific amount for each
unit of work produced.
Financial Incentives
 Base plus Incentive – combines a wage or
salary with an additional amount determined
by the employee’s performance.
Profit sharing – employees receive their
regular compensation plus a share of the
profits earned by a company.
Encourages a commitment to the
company, teamwork and effective customer
service so that profits will be high.
Fringe Benefits
 Some required by federal and state
government:

Social Security, Medicare, Overtime, Workman’s
Comp, Unemployment.
 Individual Companies – insurance plans
including health, life, dental and disability.
 Paid Vacation
 Cost to company – 20% to 40% of an
employee’s wages.
Training and Development
 Training materials and manuals
 Experienced employees can also train new
employees.
 New equipment training may require a hired trainer
and training is given to all employees during a
scheduled period of time.
 Outside sources: high schools, community colleges,
universities, adult education classes, Small Business
Administration, seminars, classes, etc.