Small Businesses Take Advantage of Psychology Insights Into Human Resource Management

hrm for small business
Image by ambro
Small business owners have been visiting for years to find tips about best practices for management and responsible business ownership, including ways to thank hardworking employees for their investment in the company. Smart entrepreneurs know the value of maintaining the psychological health of their employees by rewarding their accomplishments and fairly addressing workplace conflicts. Today, Alexa Thompson, who writes about psychology in all its forms, including where to find psychology jobs, discusses the ways that company leaders can use established psychological theories to improve employee morale.

Human resource management is one of the most crucial aspects of small business leadership. By optimizing the potential contributions of each employee and fostering cooperative relationships between various members of the workforce, corporate leaders are able to maximize the productivity and efficiency of their companies. And while many managers view these investments as frivolous expenses during poor economic times, effective small business leaders employ human resource management techniques that are neither costly nor needlessly time-consuming.

Human resource management is not only the process of overseeing employees within an organized infrastructure, but also involves managing the overall dynamic between leaders and subordinates. A company’s HR department is responsible for every step of the employment process, from initially drawing applicants and conducting interviews to assessing their abilities and rewarding them for successful undertakings.

In fact, many employers view human resource management as a form of human capital investment. This umbrella term refers to the measures taken by company leaders to ensure their employees are confident, competent and resourceful, in both the course of daily operations and their long-term careers. When employees feel like valuable assets within a corporate structure – as opposed to cogs in the proverbial machine – they are likelier to deliver high-quality work and maintain positive inter-office relationships. Because of these potential returns, many small business experts today tout the necessity of human capital investment.

One of the most effective ways for company leaders to optimize human capital through human resource management is to facilitate conflict resolution between workers. Though virtually every small business manager strives to create a cooperative, conflict-free environment for employees, interpersonal issues will arise in any workplace.

Sean Mullin of Demand Media notes that leaders can take several psychological approaches to workplace conflict management. The social identity theory, for instance, postulates that employees act in their best interest when individuals are rewarded; for this reason, incentives like group trips and department bonuses encourage people to work together more effectively. Another applicable model is the sociocognitive conflict theory, which emphasizes the need for diplomacy when two or more groups with differing opinions are formed within a singular workplace. Employers should also optimize their own relationships with employees by managing a company efficiently and transparently.

Finally, managers are encouraged to acknowledge the hard work of employees during especially busy or high-stress periods. By recognizing their performance and rewarding it accordingly, small business leaders earn the respect of subordinates.

Workplaces that practice these forms of human resource management benefit both the employees and the organization. Employees who are physically and mentally healthy have increased job satisfaction, higher morale and a strong motivation to perform at the highest level. The company, on the other hand, is rewarded with increased productivity and efficiency, lower job turnover rates, fewer negative workplace incidents (such as accidents and injuries) and the ability to draw in high-quality job applicants for open positions.

When corporate leaders treat employees as necessary tools for completing projects, workplace conflict and negativity often hinders company success. However, by adopting the attitude that employees are human resources – and taking steps to ensure that workers functions to their highest potential – small business managers stand to earn huge returns for their companies.