How to manage employees and build an incredible team

9 minutes

Your team members are your greatest asset, but they can also be your greatest challenge. Knowing how to manage employees is essential to fostering a healthy work environment and a flourishing business.

In an age where employees switch jobs with little warning, your management style may be key to fostering a strong company culture and stable work environment.

As a small business owner, you probably don't have your own human resources department to fall back on. That's okay. You can still polish your management skills to help your employees grow.

How to manage your employees

What's the best way to manage your employees? That depends. Every work environment is different, and you may discover that your management style has to evolve as your business changes and grows. Still, you can adopt some basic practices to become an effective manager.

1. Hire the right person

Effective employee management starts with the hiring process. Your goal should be to connect the right person to the job. That means seeking out someone who demonstrates some passion and enthusiasm for your business and has the interpersonal skills they'll need to thrive.

Don't worry about hiring an industry expert. Instead, look for an employee with a teachable, can-do attitude.

During the job interview, ask questions about how they learned new skills at their previous job or about experiences where they could adapt to new tasks and job requirements. You might not hire an expert, but you'll have a candidate that you can help develop over time.

Of course, it's also up to you to provide the right resources for job seekers. You'll need to ensure that you have enough funding to cover the cost of a new hire, as well as the time and resources required to train a new employee.

2. Set clear expectations

A job description alone won't be sufficient to prepare a new employee for a role in your company. As a manager, you'll need to set clear, measurable expectations to help your employees develop.

Business experts often speak of "SMART" goals, an acronym that can help you establish expectations for each of your employees. SMART goals are those that are:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-bound

For example, if you hire a new employee to help with sales, you might set a goal that they increase sales of a specific product by 50% within their first six months of hire. This demand provides a specific, measurable goal that the employee can strive for within the window of time specified.

Aside from employee goals, setting expectations also means helping your employees assimilate into your business culture. This approach means assisting your staff members understand what's expected of them regarding:

  • Work hours
  • Workplace attire
  • Safety practices
  • Attendance at meetings

Additionally, you may also expect your employees to develop a new skillset and provide them guidance on learning and growing as valued members of your team.

3. Monitor and review employee performance

Once you establish clear goals and expectations, it's ultimately up to you to monitor and review your team. At the very least, this means providing annual performance reviews and giving positive feedback on how your team members are reaching their goals.

How do you monitor employee performance? Look for data such as:

  • Sales figures
  • Attendance records
  • Client feedback
  • Disciplinary actions

If you're part of a larger team, you might ask some employees to manage others. In these work environments, your employee reviews can be assisted by (or even performed by) each employee's immediate supervisor while you review the performance of your senior employees.

4. Reward exceptional performance

Encourage employee engagement by incentivizing good performance. When an employee makes a particularly valuable contribution to your company, reward them with a small bonus check, a gift card, or even simple vocal recognition.

Make it public. Sure, the "employee of the month" program seems cheesy, but employee recognition can become more high-tech by showcasing your star employees on your website or social media page(s). Other employees can learn from this example, fostering a positive environment where employees feel valued.

5. Establish disciplinary procedures

Conversely, you may have employees who struggle to meet company expectations or flagrantly violate your workplace standards. This situation needs to be addressed immediately before the same behaviors start popping up in your other staff members.

Your first step should be a verbal warning, preferably in private. If your employees don't respond and adjust course, you may need to take additional measures. These measures usually involve a reduction in work hours (though only for part-time employees) or a temporary suspension.

Ideally, your message is received. Otherwise, you may need to terminate the employee. Make sure to keep careful, detailed records of all workplace infractions, as well as the dates when you sought to communicate with your employees to make corrections.

Remember, your top priority should be to help your employees reach their potential. Firing should be the last resort, though there may be times when this becomes your only remaining option.

6. Utilize employee management software

As your team grows, so do your responsibilities. Some companies opt to hire a human resources (HR) manager, though that's hardly your only option.

Consider implementing some type of employee management system. This software can help you handle administrative tasks such as payroll and managing timesheets, and the communication features built into these software platforms can help you increase employee engagement and keep everyone on the same page.

Plus, these digital tools can provide valuable assistance with training and onboarding, which will save you time and streamline bringing on new employees.

Top tips for first-time managers

Legendary football coach Vince Lombardi famously observed that "leaders are made, not born." So how do you go from being a new manager to being a great manager? Here are some of the best management tips to help you become a better manager and keep your employees engaged.

Communicate a common purpose

Younger workers, in particular, are looking for more than a job title and a 9-to-5 workweek. Today's workforce is hungry for a sense of purpose and wants to be a part of an organization that's greater than themselves.

Good managers keep their team organized around this common purpose. Your mission statement and business objectives are already a key part of your long-range strategy, but sharing this vision with your workers can keep employees motivated and devoted not just to the details of their job but to the higher purpose of your business.

Encourage employee engagement through listening

Encourage employees to share their thoughts regularly. One way to do that is to end each conversation by asking: "Is there anything else?" This question can foster open communication and make your employees feel heard.

At a smaller company, you may be able to establish an open-door policy where employees feel free to visit with you and dialogue about their job or the company as a whole. Just be cautious since this policy might be unsustainable as your workforce grows.

Engagement demands that managers practice good emotional intelligence. In other words, good managers listen well and are able to empathize with what their employees need to communicate. Try these communication tips when conversing with your employees:

  • Make eye contact and nod as your employee is talking
  • Avoid negative body language (e.g., crossing your arms, frowning)
  • Repeat back what you hear your employee saying and ask for clarification

You may not be able to solve every issue every time, but you've at least helped provide an environment of open communication, which can go a long way to helping employee morale.

Share the load

One of the most important leadership skills you can develop is the ability to delegate. You can't do it all, and the best managers know that work is easiest and most enjoyable when it's shared.

Early in your business, you might hire an employee with a broad skill set. You'll be able to delegate key responsibilities to this employee, and as you hire more employees, you'll have a right-hand assistant who can help you run critical areas of your company on a day-to-day basis.

Set clear boundaries

While it's important to encourage feedback from your employees, it's also important that you not overshare with your staff members. One of the worst mistakes a manager can make is to try to be everyone's friend.

This avoidance doesn't prevent you from having casual conversations with your employees, but it means your communication should remain professional and avoid conversations at a deep, personal level.

Here are some management tips that can help you establish better workplace boundaries:

  • Avoid actively participating in workplace gossip (ignore it)
  • Don't send/accept "friend" requests on social media
  • Create a dedicated break room for your employees

Most employees will recognize the need for clear, professional boundaries in the workforce, so remember that your primary goal is to be their leader, mentor, and not necessarily their personal friend.

Avoid constant feedback

When you first hire a new employee, you may need to manage them more directly. Over time, this management approach can veer toward "micromanagement," which can actually hinder staff productivity and undermine employee confidence.

Instead, trust your staff. If you've delegated responsibility to other employees, you can rely on these individuals to supervise lower-ranking employees. 

Be patient

Management skills take time to develop. Steering the ship won't always mean smooth sailing. Along the way, you'll likely discover some bad habits you'll need to break to reach your leadership potential and help your employees grow.

Give yourself (and your employees) time to develop and make course corrections as necessary to improve the health and strength of your business.

The best employee management system

Earlier, we suggested that managers utilize employee management software to help them manage their company. An employee management system can go a long way in helping with organization and assist you with such HR tasks as:

  • Payroll
  • Performance management
  • Tracking billable hours
  • Managing benefits and paid time off
  • Engaging employees through communication tools and surveys

Invoice2go, a company provides software that can help you run payroll and navigate the challenges of payroll taxes. This approach simplifies one of your most common administrative needs, so you can focus on managing your employees.

Do more than merely manage

Invoice2go has been improving the world of business, offering the latest solutions for invoicing, banking, payroll, and more. Our platform can relieve your administrative burdens, so you can stay focused on employee management tasks and grow as a leader.

Sign up today for our free, 30-day free trial, and see what Invoice2go can do for your company.

Frequently asked questions

Effective employee management requires managers to ask questions and sharpen their leadership skills constantly. Here are some of the top questions we hear from small business managers:

What is the best employee management solution for remote workers?

Many American workers got a taste for telecommuting during the 2020 pandemic and show no desire to return to "normal."

Whether you offer a hybrid schedule or allow workers to telecommute full time, you'll want to find employee management software that helps you communicate with your workforce in real-time. You may also consider tools that help you monitor data such as hours worked or the geographic location of your employees.

Can I dock an employee's pay for mistakes?

Unless the employee agrees to this policy at the date of hire, you generally cannot dock an employee's pay simply for poor performance. If your employee works part-time, you may be able to reduce their hours as a penalty, but remember: your goal should be to develop new habits, not merely punish old ones.

Your employee management strategy should include ways to train and motivate underperforming employees, so your whole team works together.

How can I prevent workplace distractions?

Some employee management software can be used to prevent your employees from being distracted. When the employee management software detects that employees are on social media sites or other time-stealing pages, the HR software will gently nudge them to get back to business.


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