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Employees In Your Franchise Business
Thom S. Crimans Index 1. Before You Start
1. Before You Start Question: When should you start thinking about employees in your new franchise business? Answer. Like any other aspect of the business, before you decide to buy. How good are you? It is time to be honest with yourself about yourself. What is your experience level in hiring and managing people? Is it a strength? A weakness? An unknown? What types of people do you enjoy working with? Unskilled? Technicians? Salespeople? Professionals? Is having employees a factor that attracts you to having your own business? For some, the idea of developing a team and motivating people to accomplish a task is part of the reward. For others, employees are simply a mean to an end; a necessary evil in having a business. If one of your goals is to eventually be an absentee owner, you will certainly have to have employees in the business. All of these considerations have implications for what is the right business for you. Just as you should not invest in a business that is beyond your financial means, neither should you start a business that is beyond your skill level in hiring and managing employees. What are the choices? Your success in most businesses will depend to some degree on your ability to select and maintain a good workforce. There are some businesses that don't require employees, though limiting yourself to such businesses will greatly reduce your choices. More realistically, there is a wide variety in both the number and skill level of employees required in various types of businesses. Here are some examples: * A staffing or temporary employment business. This is all about hiring people, though less about managing a long-term relationship. * Fast food. Fast food businesses can be some of the most labor intensive options in franchising. Hiring and training employees is often an ongoing function in operating the business. Your ability to manage people and manage managers will often be a key factor in your success. * Automotive businesses. Many automotive concepts require a much smaller staff than a fast food restaurant. On the other hand, you may be hiring highly skilled technicians who are harder to find and require a higher level of compensation. You will be wanting to attract individuals who want to make a career of working for you. * Mall or Strip Mall Retail. Many of these businesses require few employees and do not require a high level of skill and training. * A maid business. Employees are a key to growing this type of business. Hiring and training the right number is essential. Sending your employees into other peoples home presents additional challenges. On the other hand, these businesses require significantly fewer employees than fast food businesses for the same volume of business. In addition, you can offer employees a "day" job that will give you a competitive edge in recruiting. * A sales and management training business. You may only need one staff assistant in a business like this. Of course getting the right person can make a big difference. This person will be your assistant and in many respects your partner in the business. This is not intended to be a complete list of the options regarding employees in a business. Many franchise concepts offer unique employment situations. What is important is for you to understand this element of the business and chose a business which matches your skills in managing a workforce. When do I hire? The key to getting a good start. If the day you sign the franchise agreement is the scariest day of your life, the second most scary will be the day you hire your first employee. It will also be a vital step in making your franchise operation successful. Too often, franchisees may try to delay hiring to save a few dollars. Unfortunately this can be like opening your T-shirt shop and saving money by not stocking size XL. You may save money on the purchase of inventory, but you are going to have a very hard time meeting customer expectations. Another common mistake is substituting yourself for an employee. Again, it may seem like a prudent step and one that will save money. The problem is that the time you spend working in the business reduces the time and energy you have to manage the business. This can be a greater problem in service businesses where the level of employment increases gradually as a customer base is developed. So how do you know when to hire? Your business plan should include a staffing budget. If your research and the franchisor indicate that a crew of 4 is needed and that training takes 2 weeks, you know you need to hire 4 people at least 2 weeks before opening day. In addition to the recommendations of the franchisor this is a time to get additional benefits from your due diligence. What was the staffing strategy of the most successful franchisees? Learn from their experience and that of the franchisor. 2. Preparing for the Interview The time is right, we know the number of people we need, so where do we start? The search for good employees begins by knowing what we want to find. Our first thought might be that this is obvious. If we are looking for a restaurant employee we want someone with experience in the food business, right? If we are in the tire business we want someone with automotive experience, right? Maybe. Hiring has been described as an art. Like many artistic endeavors, however, we can improve our results if we go about it logically and systematically. A common mistake in hiring is to focus too much on the "technical" qualifications for the job. In reality less than 5% of all employee relations problems stem from lack of technical skill. When we think of a job we usually think of it as a task or a collection of tasks. Consequently, when we describe a job we do so by listing the tasks. Whether we write formal job descriptions or just have a mental note, it is a list of tasks. As we think about selecting a person to do the job we must transition from the list of tasks to a list of attributes. An attribute is a quality, ability, or characteristic. We want to list those attributes that are important to success in the position we are trying to fill. For example, most sales positions would require the attribute of good verbal communication skills. Each position has a unique set of attributes, some more important than others. We can divide attributes into three general categories (1) knowledge, skill, and ability; (2) willingness; (3) interpersonal skills. First let's consider knowledge, skill, and ability. This is often the first kind of attributes we think about. These are usually the more obvious "technical" requirements. If we are filling the position of salesperson, we probably want someone experienced and trained in sales. How much training and experience? That depends on the job. This is one reason it is important to use a job description. The title salesperson may be used differently in different businesses. What type of selling is important and how much training can you provide? Assigning unnecessarily high attributes or requirements may screen out good people and my cause legal problems for your company. The second category of attributes is willingness. No matter how well-trained or experienced the person is, if they are unwilling to do the job or work under the conditions that go with it they will not succeed. Consider a hair stylist. Even if an applicant is well trained and has a good record, they will only be successful if they are willing to work on the shift that is available. If we are filling an evening shift job, the person unwilling to work between 4 and 8:00P will not succeed. Every job has characteristics that may effect a person's willingness to do it. A telemarketer must be willing to deal with a high level of rejection. A lawn care technician must be willing to work outdoors in hot weather. Now let's consider the third type of attribute -- interpersonal skills. Taken out of the context of the job, interpersonal skills means very little. We need to look at the job and define the specific skills that are relevant. For example, a maid must be able to build long term trusting relationships with co-workers. On the other hand, a sales clerk must be able to quickly gain the trust of a customer. Building trust relationships is important to both, but the circumstances are different. Some people will be good at one but not the other. In developing a list of attributes it is important to think in terms of the whole job. This is another reason to use a job description. The following is a checklist to use in developing a complete list of attributes. Looking at these characteristics of each job will guide to thinking of all the important attributes. 1. Specific task related knowledge, skills, or abilities
Once we have defined the attributes necessary for success, we must effectively determine whether or not the applicant possesses those attributes. Asking effective questions is one of the most important methods of doing this. While no two interviews will be exactly the same, it is important to plan a line of questions that will evaluate the applicant on each attribute. Types of Questions Any interview question can be categorized as either close-ended or open-ended. A close-ended question can be answered in one or two words, usually yes or no. This type of question is probably the type most frequently used but least effective in the interview. "Do you work well under pressure?" is a close ended question. How many applicants would answer no? Close-ended questions do have a place in the interview, but most of the time it is more effective to ask open-ended questions. An open-ended question is the opposite of closed. It requires discussion, explanation, or elaboration by the responder. In the precious little time available in the interview we want to learn as much about her or him as we can. Keeping them talking and us listening is the best way to do that. For this reason, we want to use open-ended questions as much as possible. Open-ended questions can be developed for most any issue we want to explore. "Explain how you work well under pressure?" transforms our prior closed-ended question to an open one. Typical lead-ins to open-ended questions are: "Explain to me how you did.......
The Funnel Concept During the course of the interview, we want to move from the general to the specific. We can think of the process as a funnel. At the top, or the beginning, we use open-ended questions to fill the funnel with a lot of information. As we approach the end, or bottom, we focus that information on the attribute we want to evaluate. Later in the interview is the time to use close-ended questions. They can be used to clarify and confirm your understanding. For example, "What I hear you saying is that you have been the store manager for two years, is that correct?" They may also be used to pin down the applicant when they are vague about their experience. For example, "Is it true that you were the project leader?" These type of questions can "funnel" the general discussions from the beginning of the interview, into a clear picture of the applicants qualifications or attributes by the end. The following are some examples of open-ended questions designed to evaluate an attribute. SAMPLE QUESTIONS Attribute: Detail-oriented. Questions: 1. What action have you taken when you noticed an error or mistake in your job area? Outside your job area? (what to look for: does applicant respond to errors? Do they ignore them? Are they more willing to point out others errors verses their own? Do they care if errors occur?) 2. Explain a job you have been responsible for that required a high degree of accuracy and how did you ensure that accuracy? (what to look for: Does the applicant have direct experience in a detail oriented job?) 3. Give me an example of when a deadline is more important than completing every detail? And then give me an example of when completion of every detail is more important than meeting the deadline? (What to look for: Can the applicant give specific example? Do they demonstrate an awareness of when details are important and when there can be too much detail?) 4. On a scale from 1 to 10, how would you rate yourself in terms of being detail oriented and why? (How does the applicant perceive her/him self? Can they give examples?) 5. Describe your thoughts on being assigned tasks with detailed directions verses being given a general overview of an assignment. (What to look for: How would the applicant go about handling each situation? Do they favor one over the other and why?) 6. Tell me how detail is important in your current job and give examples. Attribute: Attendance and Stable Work History Questions: 1 Describe your reasons for leaving each place of previous employment. (Are the reasons acceptable?) 2 Describe your reasons for wanting to make a job change at this time. (Is the applicant looking to "escape" their present position?) 3 Explain why you are interested in employment with our company? What are you seeking with us that you are not getting with your current employer? (Is this reason one that would keep this person with us?) 4 Describe and explain any gaps in employment/school record. (Are they acceptable reasons?) 5 What do you feel is a good attendance record for a year? 6 Explain a time when your job became very difficult. What did you do? (Stay with if? Quit? Suggest changes?) You will not need to use every question for every attribute with each applicant. The idea is to have enough of questions on each attribute, so you can probe the applicant until you are satisfied they can perform satisfactorily. 3. Where to find employees Over time, the supply of workers varies. When supply is short you must be more creative in attracting qualified prospects. The most common approach is the help wanted ad. While still effective, you may be disappointed in the results when many companies are competing for the same workers. Here are some options you may not have considered: * State Employment Services. Every state operates unemployment compensation programs that are tied to a job placement function. You can list your job opening with them. They will pre-screen applicants and may even do some testing for you. * Temporary Employment Companies. There are many companies who do temporary placement. It is a growing industry as companies outsource their staffing needs. These companies will have provisions for you hiring a person that they placed with you. Often, you may pay no additional fee once the temporary worker has worked for a specified period of time. One great advantage of this approach is the opportunity it provides to "test drive" the employee before you hire. If they are not working out, you simply send them back to the temp company. * Seniors. As many people remain healthy and active much longer than in the past, there is an increasing pool of older people who are interested in making extra income. In many cases they have a stronger work ethic than younger employees and can bring some real talent to you new business. * Religious Organizations. Many large churches and synagogues provide in-house job referral systems for their members. They will be glad to make their members aware of your needs. * Colleges & Universities. If your business lends itself to part-time workers this can be a great source. Most colleges and universities provide job referral services to their students. In most cities, all of the schools share job listings which can make your task a little lighter. * Job Fairs. These can be sponsored by various groups -- schools, local governments, etc. You may incur the expense of having a booth, but it can provide an opportunity to sell your opportunity on a face-to-face basis. * Your employees. As you grow, your current staff can be a great source of additional employees. They know you, the requirements of the job, and they have a built-in desire to have co-workers who are responsible and will carry their load. 4. Conducting the Interview Now that you have a pool of prospective employees and you know what you need to learn about their attributes on the job it is time for the interview. The questions you have developed will provide the meat of the interview, now all you need is a format. It is important that the interview be efficient and productive as possible. Having a plan will help. Shown below is a sample interview format. The time can be longer or shorter, but proportionally it should be about the same. TYPICAL INTERVIEW FORMAT TIME CONTENT PURPOSE 3 minutes
Introduce yourself and "small talk that is big talk"
Put you & applicant at ease Get applicant talking 2 minutes
Say this -- "During the time we have together I want to learn all I can about you and your qualifications for the position. Let me start out by asking you some questions, then I will answer yours. By the way, we are interviewing a lot of people so I hope you don't mind if I take notes. Feel free to do the same" Let's applicant know the game plan Puts applicant on notice that they are to talk -- to answer your questions Politely postpones their questions 20 minutes
Ask the questions you have prepared. Gather information needed to do a thorough evaluation. You are finished when you have all the information you need. 10 minutes
Listen closely showing interest and concern "Sell" your organization and the position. This lets the applicant gather information needed to make a decision 5 minutes
Documentation is critical in the selection process and in defending possible legal challenges
Legal Issues There are numerous laws which effect what questions can and cannot be asked in an interview. Concern about asking a "prohibited" question can prevent the interviewer from conducting a relaxed and thorough interview. Though there are numerous individual laws, their collective purpose is to prevent discrimination against applicants based on race, sex, color, religion, national origin, veteran status, and real or perceived disabilities. By treating applicants with respect and applying two simple rules of thumb you can navigate your way safely through the sea of regulations: Rule of Thumb # 1 -- Don't ask questions that adversely effect a particular group. An extreme example is the question "Are you pregnant?" Clearly this question affects women quite differently than men. Other examples are less obvious. Questions about general qualifications such as "Do you have a high school education?" have an adverse effect on blacks (on the average a lower percentage of blacks have high school diplomas than whites). So how can we make sense out of this? This leads to the second rule: Rule of Thumb # 2 -- Do ask only job related questions. The best way to stay out of trouble is to focus on what you really wanted to know anyway -- is the person qualified to do the job and will they be on the job. The motivation behind asking about pregnancy is a concern that the employee will be absent from work or will not stay in the job for a reasonable period of time. Our real (and legal) concern is will the person be on the job. The best way to get this information is to ask questions about the person's career plans and investigate their work habits. Questions about education and training must be job related. If we use the process of developing attributes and questions related to the job description we will generate better questions that are legal. Rule of Thumb #3 -- ADA -- Are there reasonable accommodations which would allow a disabled person to do the job? The Americans with Disabilities Act prohibits discrimination against a person considered to have a disability. The act covers persons with physiological disorders or conditions, cosmetic disfigurement, anatomical loss, and mental or psychological disorders. Further, persons are protected who have an impairment, have a record of an impairment, or are regarded as having an impairment. The act does not require you to hire an unqualified person. Therefore, as with any other applicant, your interview should focus on the person's qualifications. If the person is not qualified there is no reason to get into reasonable accommodation. On the other hand, a qualified person with an impairment may be the person you select for the position, so understanding the accommodation required is important. The law precludes discrimination against a qualified person who can perform the essential functions of the job. Employment decisions cannot be based on a marginal function. It is important to approach a discussion of reasonable accommodation from a positive standpoint. What would be necessary to allow this person to do the job? You may have ideas and so will the applicant. They can be your best source of suggestions. Ask for their ideas. It is not necessary to resolve this issue in the interview. Employers are not required to make the most expensive reasonable accommodation. Your objective in the interview is twofold: (1) gain a perspective on what the individuals' needs are (2) demonstrate a willingness to work with a qualified disabled applicant to place them in the job without regard to their impairment. 5. Managing and Motivating Your Employees Finding the right people is just the beginning. Your longterm success will depend on your ability to manage and motivate your staff. Dwight Eisenhower once said "Leadership is the art of getting someone else to do something you want done, because he (she) wants to do it." Indeed, all the items on a leader's job description can be summarized as getting desired results from the people they lead. How you go about this will depend on a number of factors including -- the nature of your business, the type of job, and you. Let's start with you. Each of us has our own management style. On the most fundamental level, management is all about how we interact with other people. There are a number of psychological profile programs that evaluate our interaction style. Many of these, such as Myers Briggs, are readily available at little or no expense. If you have never done one of these profiles it would be a wise investment of time and money. Not only will you learn about your style, you will also see how it contrasts with the style of others. The nature of your business will make a difference as well. The fact that your business is a small business will be different for you if your background is working for a large corporation. In some respects there are disadvantages. You will not have large human resources staffs, you probably will not be able to offer rich benefit plans, and the career paths in your organization may be limited. On the other hand, you offer some distinct advantages. Your employees get to work very closely with the CEO -- YOU! This means there can be a close and regular communication about the direction of the business and changes in the marketplace. Large corporations use elaborate plans and high paid consultants to get this kind of communication. Your employees can see the big picture more easily and see that they are making a contribution. It is the rare person who does not feel the need to be needed. The problem for large companies is that employees really cannot see their individual impact on results. Another advantage is your ability to be more flexible. You must be careful with this and avoid the perception of favoritism, but you have a great ability to deal more flexibly with employees individual needs. The age of downsizing in large corporations has eliminated any remaining semblance of company loyalty to the employee. As a small business owner, you are in a position to take care of the people who have helped you to be successful. The most important part of you in managing your employees is to remember you are the leader. The buck stops with you. Just as the coach is a role model for the players on the team you are the role model for how things get done in your business. You set the example for how things get done and how the business operates. Results will only be as high as the lowest level of performance that you tolerate. The type of work will impact how you manage and motivate the employee. For example, if your business is a fast food restaurant or a maid service, most of your employees will not be in career positions. You may often be the first employment experience for many of your employees. Having complete, detailed instructions and clear straightforward rules will be important. You will also have more sophisticated positions. Even in businesses with a number of simple jobs you will have managers or crew chiefs. If your business is a more technical business, such as automotive or printing, you will have higher skilled employees who will be looking for career opportunities. Offering them an environment where they can grow and develop is more important. They will be expecting to get more satisfaction from their work. Profit sharing or some form of sharing in the rewards of success can be appropriate. Some owners even provide employees with options for ownership in the business. 6. Dealing with Problem Employees No matter how carefully you screen applicants, from time to time employee relations problems will arise. Here is a fictitious, but realistic example: Sandy was pleased with the recruiting job she did to hire Amber. Amber would be managing the second location in Sandy's executive suites franchise. Her background in customer service looked good and she had a great background in office skills. But the first day on the job she came in a few minutes late. By noon she was asking Sandy for special work hours to accommodate her son's summer activities. None of this had come up during the interview. On top of everything else, Amber seemed to be trying, but was having trouble handling incoming phone calls. It was clear things were not going well. Unfortunately, Sandy's initial response was all too typical. She put off telling Amber of her concerns. She tried to reassure herself that this was just coincidence and it would all workout. When a friend suggested she had made a mistake and should let the new person go, Sandy said she felt responsible; she had made a commitment to Amber and felt obliged to work things out. Fortunately this story has a happy ending. After another week of poor performance Sandy saw the light and showed Amber the door. Dealing with problem employees is NEVER on the list of things small business owners enjoy about their business. To be an entrepreneur is to be an optimist. Dealing with the reality that others do not share your enthusiasm, dedication, and satisfaction in a job well done is not a natural act, but is must be done. Your small business cannot tolerate anyone not living up to the requirements of the job. Begin with the Basics It is only fair to let employees know the rules of the game. Too many business owners assume that employees will follow rules of respect and fairness without having them written out. Unfortunately, it is not a good assumption. Having written rules not only communicates what is important, it sets the foundation for effectively applying the rules should problems occur. Basic rules should be written and posted appropriately in the workplace. While some businesses will have special rules, the basics are similar in any company including your own. Company rules are usually divided into two categories depending on the seriousness of the offense and consequently the punishment. One category, the less serious, will result in progressive discipline. Violation of rule in the second category, can result in immediate firing. Here is a list of typical work rules: Offenses subject to progressive discipline: 1. Excessive absence or tardiness.
Offenses subject to serious discipline including immediate discharge: 1. Theft
Maintaining the Standards Written and verbal communication are the first steps toward dealing with potential problems. The next step is maintaining or enforcing the standards. If the rules are not enforced, they are worth less than the paper they are written on. The time to deal with a problem is the moment you suspect there is one. Because most of us are not looking for trouble, we often don't see it. The chances are if a problem has caught your attention it is serious enough to warrant further investigation. Failure to deal with one problem employee can be worse than you might imagine. Your good employees will be discouraged if you don't deal with the troublemakers. Your failure to act may encourage them to develop the same bad habits as the original offender. It is important to be systematic in your approach to any problem. In today's litigious world, you may be called upon to defend your actions in court. Over the years, the steps listed below have generally come to be accepted as the appropriate steps for taking effective, justified discipline. Moreover, if you follow these steps your other employees are likely to see your actions as fair. Here they are: ELEMENTS OF EFFECTIVE DISCIPLINE EMPLOYEE KNOWS WHAT IS EXPECTED.
TIMELY & CONSISTENT.
APPROPRIATE AND REASONABLE IN RELATION TO THE OFFENSE.
BASED ON FACTS AND THOROUGH INVESTIGATION.
RESPECTFUL OF EMPLOYEE.
GAIN EMPLOYEE COMMITMENT.
DOCUMENTED.
FOLLOW-UP.
7. What to Expect From the Franchisor It is best to answer this first in terms of what not to expect. The basic premise in franchising is this is your business, not the franchisor. Any employees are your employees. This represents not only the position of the franchisor, but the courts as well. In a recent case, a franchisor was found not to be liable for the discriminatory actions of a franchisee. As a rule, the franchisor expects you to bring appropriate human resource skills to the table along with your business management skills. This being said, many franchisors provide various types of assistance in the employee relations arena. Examples of the types of help provide include: * Suggested help wanted ads and compensation schemes * Employment tests for screening applicants * Guidelines for when and how many employees to hire * Training for managers and other employees (there may be some cost to you) * Regional or national recruitment programs * Insurance programs. The most common would be worker's compensation programs and bonding against theft. Less common are programs for non regulated benefits such as health insurance. |
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