HR MANAGEMENT - 7 Top HR Mistakes Companies Make

By: Jennifer Leahy

Employees are a critical component of nearly all businesses. Dealing with employee-related issues – human resources – can consume many hours of a manager’s time. HR mistakes made while dealing with employees can come back to haunt employers and cause serious consequences for companies.

Recognizing the seven most common HR mistakes is critical for all business owners and managers.

HR Mistake #1:  No employee handbook.

Every business, no matter how small, should have an employee handbook. If you don’t put the do's and don’ts in writing, you’re asking for trouble. Even a few pages outlining acceptable and expected behavior provides employees with tangible guidelines. The employee handbook should be updated each year and all employees should sign a document stating that they received and read the publication.
 

HR Mistake #2:  Lackadaisical employee record keeping.

Written policies and standard operating procedures are the boundaries that govern employee conduct. When a violation occurs, it must be accurately and thoroughly documented. Though it may seem like a waste of time to jot down in a file that someone was reprimanded for repeated tardiness, it is important evidence that can support a decision to terminate that individual for poor performance.
 

HR Mistake #3:  Not knowing your competitors.  

Keeping salaries and benefits up to industry standards is crucial. Sub-par compensation packages can cause employees to seek employment elsewhere. Your competitors will try to lure your best employees; it’s your responsibility to be sure they aren’t tempted to stray.“If you are among the lower paying companies in the industry, especially if the competitors are in the same geographic location, employees will likely hop right on over to the competition if they're offered a similar opportunity with better pay,” says Jenny Foss, president of Troy, Michigan-based Ladder Recruiting Group and author of jobjenny.com.

HR Mistake #4: Withholding employee praise AND constructive criticism.

Failure to recognize stellar employees and make poor performers aware of their deficiencies is a common management error. Though your high-performing employees may cause you little stress, it is essential that you convey your appreciation. It takes only a few minutes to say (or even e-mail), “I really appreciate the way you handled the situation with the difficult customer today.”Conversely, employees who are not achieving the necessary results must be told in a clear and concise manner that the standard of their work must increase. Lying during evaluations of poor-performing employees in an attempt to spare their feelings is asking for trouble. People cannot change when they are not aware there is a problem.
 

HR Mistake #5:  Hasty hires and hazy job descriptions.

Poor hiring processes and employee selection can lead to a host of problems for employers. Before you even consider hiring someone, take time to flesh out exactly why you are hiring. A few hours spent crafting a solid job description can prevent countless hours of future hassle. A candidate may be a wonderful human being and offer impressive skills but their skill set must address your needs.Remember, patience is a virtue when hiring. Keeping a cool head and not giving in to the urge to hire the first suitable candidate can prevent you from making the costly mistake of hiring the wrong person.
 

HR Mistake #6:  Employment Compliance Ignorance.

Managers must be fluent in employment laws and regulations. Failure to keep a valid I-9 (verification of employee eligibility) on file can be a costly mistake. Non-compliance to OSHA (Occupational Safety & Health Administration) regulations for your industry may also yield stiff fines. Prevention is key. Take time to identify what regulatory agencies govern your industry and what laws must be followed.
 

HR Mistake #7:  Failure to review policies and protect business.

Don’t overlook the importance of an internal HR audit. Though a company may have once been compliant, laws and regulations change regularly. Set aside time annually to make sure your HR policies are current and complete.It’s also wise to protect your business. Employment Practices Liability Insurance provides protection from claims by former employees, current employees, and potential employees and covers a business against discrimination, wrongful termination, sexual harassment, and other employment-related allegations.
 

“The number one HR mistake is underestimating the importance and breadth of scope of human resource related needs at a company of any size,” says Michelle Moylan, HR Director at New York-based CheckPoint HR.

It’s easy to ignore the HR side of your business when things are flowing smoothly. After all there are far more pressing concerns nagging us each day. Relations with employees can be enjoyable and fulfilling or time-consuming and terrifying, depending on the situation.

Being proactive in the area of HR, recognizing and rectifying HR mistakes before they become serious problems, can save countless headaches and protect your business against costly legal claims.