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What is employee management?

Employee management is the process of managing an organization's employees, including recruiting, hiring, training, evaluating, compensating, engaging, motivating, and managing your workforce.

Keith MacKenzie
Keith MacKenzie

Passionate about human resources, employment, and business management, and an expert at sharing that expertise.

This process also involves:

  • creating and administering policies and procedures
  • monitoring and managing employee performance
  • providing guidance and support to ensure employees remain productive and motivated

Employee management differs from talent management in that it’s more tactical and administrative, whereas talent management is more focused on strategy – including career pathing, development of high-performing employees, and employee engagement/retention.

Why is employee management important?

A successful employee management strategy is crucial because a business runs efficiently when its people are managed efficiently. Proper employee management helps to create a clear structure and organizational framework within a business. This improves communication and collaboration across teams and departments – as well as up and down the chain of command.

In employee management, key performance indicators are clear, projects are implemented and carried out by the book, and compensation (in the form of bonuses and raises) and praise are assured for a job well done.

It also helps to foster good working relationships between managers and employees, which can lead to higher job satisfaction and better morale. This leads to lower turnover rates and greater employee retention, leading to more efficient budget management and higher productivity.

What makes good employee management?

Now that you know what employee management is and why it’s important, it’s time to understand the main aspects that make up a solid employee management strategy.

1. Recruitment and onboarding

The first element of employee management is in the recruitment process itself. Even before a candidate is hired, your organization is setting expectations in terms of compensation, career opportunity, and company culture. When this aspect is managed efficiently, then you’re setting clear expectations for your new employees and delivering on them.

Likewise, a smoothly executed onboarding strategy sets your new hires for success from the get-go. Learn how you can ensure a consistent and positive onboarding experience in your company.

2. Performance monitoring

Employees are more motivated when their expected outcomes are clear and attainable, and they’re compensated for successful delivery on their KPIs. Consequently, managing your employees must include monitoring their performance on a regular basis – ideally in a tangible way.

For example, your SDRs are expected to convert a specific percentage of the leads they’re given. Your dev team must build a new feature by the end of the quarter. Your customer support team must resolve tickets to the customer’s satisfaction within a specific period of time.

When you monitor all of these metrics, you are not only establishing clear goalposts for your teams, but you’re also making it easier for your company to identify and reward high performers for their stellar work.

3. Communication channels

Communication is a crucial ingredient in the playbook for a smoothly operating business. Managing your employees includes numerous forms of communication:

  • Team manager communication: the manager of a team works with team members in outlining projects, assigning duties, setting expectations, etc.
  • Departmental communication: the leader of a department communicates expected deliverables as outlined in board and executive meetings to team managers and members
  • Top-down communication: the leaders of an organization communicate with employees on business goals and results via all-hands
  • Bottom-up communication: as above, but the other way around – where employees can communicate up the ladder to management and executives on their work needs, priorities and experiences via surveys, 1-1s, reviews, etc.
  • Collaborative communication: colleagues communicate laterally as they work together on mutual projects

There’s more, of course – communications can be complex, and that’s no different in the workplace.

4. Rewards and incentives

Employees are more motivated to do a good job when the work is not only compensated, but also incentivized and rewarded. This core facet of employee management pays dividends in terms of productivity, engagement, happiness and retention.

What are the main benefits of proper employee management?

Managing your employees isn’t just about managing the person – it’s about managing their ability to do the job they’re assigned to do. If you don’t manage properly, your employees won’t be able to do their job effectively, and your overall business picture will suffer.

That’s the macro-level benefit of proper employee management. Let’s look at the more specific benefits:

1. Improve efficiency

When you have multiple team members collectively working together, you want them working with minimal overlap and maximum cohesion. That requires smart and calculated employee management which improves efficiency.

2. Increase productivity

When companies operate more efficiently, they’re more productive. A well-managed group means fewer breakdowns and overlaps, speeding up processes and increasing productivity.

3. Data security

When you’re managing your employees, you’re not just managing their work – you’re also managing their information, such as their salary, benefits, time off, contact details, bank and tax information, and other sensitive employee information. Proper employee management includes proper containment of all this data.

4. Lower long-term costs

Not only does your bottom line benefit from a more efficient and productive employee base. You’re also reducing costs related to employee turnover, duplicate and redundant efforts, expensive human errors, and budget mismanagement.

How do you improve employee management?

The payoffs of effective employee management are clear. So, how do you tangibly manage your employees so that those benefits are realized in your organization? There are a variety of ways, including but not limited to the following:

1. Set clear expectations

Establish clear expectations with your employees. This is crucial to setting them up for success. An employee should know what they’re expected to do, what their performance goals are, and what rewards and compensation they can hope to receive for reaching those KPIs.

2. Help your employees to grow

Career pathing is an important part of the employee lifecycle. An employer should guide and support its employees as they grow in their careers.

This can be achieved via learning & development programs, performance reviews, guidance and feedback, and even skills analysis. Support your employees’ growth, and they’ll stay with you.

3. Build trust

When an employee trusts their manager and executive team, they’re more motivated to succeed. This trust can be in the form of job security, delivery of promises (i.e. bonuses, promotions), and transparency and communication (i.e. all-hands, business planning). Earn their trust – and keep it strong.

4. Establish open communication early

Open and transparent communication is crucial to successful employee management. Your employees should have access to all the information they need to do their jobs effectively.

That doesn’t just include who’s responsible for what, departmental updates, and performance feedback. It also includes the higher-level stuff such as mission and vision and positioning statements, and company values.

Keep those channels of communication open – and establish that from the first day of employment.

5. Set and achieve goals together

A company ‘north star’ – in other words, the mission and vision – is crucial to success. That lays the groundwork for goals to be set at the departmental and team levels, and then assigning roles and responsibilities to individual employees to achieve these goals.

Be clear on where that north star is, what the subsequent goals are, and how you and your colleagues can achieve them.

6. Recognize employee efforts and achievements

Simply managing your employees’ work isn’t enough. Validating an employee’s hard work and success through recognition and reward is crucial to engagement and retention. Ensure that your top performers are rewarded accordingly.

7. Be consistent

Don’t promise one thing and then deliver on another. Likewise, don’t say “We’re going this way!” and then change your tune halfway through the quarter.

Make sure you’re consistent in your messaging, decisions and actions as an employer – this is crucial to gaining the trust of your colleagues.

8. Utilize employee management software

Doing all of the above can be a daunting effort for any HR professional or business leader, especially with numerous variables and tacticals throughout. Optimize your employee management by introducing software and technology into the mix.

How do you choose the right employee management software for your organization?

The right employee management software depends on the size of your organization and your specific needs. Consider your current and future needs, your budget, your software’s compatibility with existing systems in your tech stack, and the user-friendliness of your interface.

Your organization should also consider whether you need a cloud-based or on-premise solution HRIS, as well as what features meet your needs and fill your gaps. This can include time and attendance tracking, performance management and review, payroll and benefits, recognition and rewards, logistic management, company and colleague communication, and other elements of employee management.

Also, look at your needs for data security, employee support, and accessibility.

Establish what your budget is to meet all of those needs – and think about what kind of return on investment can be expected so you can justify the purchase of an employee management software.

Ultimately, look for a software solution with a good reputation, plus reviews and case studies from other organizations.

The tie-back is that good employee management equals greater retention and engagement – which leads to better productivity, a stronger reputation and a positive bottom line. Everyone benefits in the end!

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