Employee management is a broad term that encompasses every aspect of managing, developing, and interacting with your employees. The aim is to give your team members every tool and advantage necessary to help them achieve their personal goals so that your company reaches its corporate objectives.
When you understand how to manage employees in a small business, your employees become more efficient, engaged, loyal, and supportive of the company and their work. As such, your company can expect increased employee satisfaction, engagement, retention, and overall cost savings.
6 Key Areas of Employee Management
Managing employees effectively requires adherence to these six areas, as each builds on the next. A misstep in any one area could snowball.
Employee Management Tools
Employment management is a core component of your company’s performance management system. This includes using tools to help you effectively manage your team to ensure maximum efficiency.
Employee management software will help improve workforce productivity, employee retention, and engagement, and alleviate administrative burdens for HR professionals. Check out our roundup of the best employee management software, or click through the tabs below for specific tools that help with various aspects of employee management.
Time & Attendance
Keeping track of employees’ hours and attendance is vital to your company’s cost management as well as the effective management of your team. Specifically for hourly employees, you need to know exactly how many hours they work each week. Using tools for this will make payroll much smoother.
For some employees, even in remote environments, attendance is an issue. To effectively manage employee attendance and prevent it from worsening, it’s important to correct behaviors like showing up late or clocking out early. Without software to determine when employees clock in and out, it will be challenging to know whether your workers are running late or cutting their hours short.
Performance Monitoring
Monitoring the performance of your employees is one of the most important tasks for a manager. We’re not talking about micromanaging or computer tracking software, though those are options (but not recommended).
Effective performance monitoring includes the use of data to help you gauge an employee’s effectiveness. This may include spreadsheets that you manually complete or software that automates data collection for you. Either way, you need to know if your employees are doing quality work.
One of the worst things a manager can do is confront an employee about their poor performance with no evidence to back up their claims. By monitoring performance, you have the data you need to have these conversations.
HR Management Software
HR management software is another crucial component of managing employees effectively. From payroll to benefits administration, this software will give both you and your employees a central point for all data.
Good HR management software will also provide a confidential location for your employees’ personnel files. This is where you would keep performance reviews and documentation of any disciplinary actions. This information is best kept in a centralized, confidential location to meet legal requirements for document storage.
Project Management Software
Being able to reduce a massive project to individual tasks and see the workload placed on each team member is invaluable. Good project management software allows you to see each employee’s daily task list and how these tasks contribute to larger projects. You can easily assign duties and move due dates as projects move.
Most of these tools also provide you with detailed reporting so you can see if any employee is missing deadlines that may affect future deadlines on a project.
Tips on How to Manage Employees
Employee management is a constantly evolving process. However, certain constants remain part of a solid foundation of effective employee management.
Communicate Clearly & Often
Never shut employees out. Sure, they may not need to know the intricacies of the company budget, but as it relates to their daily duties, make sure they see why their piece of the puzzle is important.
The best way to do this is to keep open lines of communication. This applies whether you are working in the same office and speaking face to face or if you have a remote-first company and communicate via other means. Your employees will thank you by being more loyal, engaged, and efficient.
Don’t Micromanage
This is hard for many managers and small business owners to hear. Study after study consistently shows that when employees are given the tools to do their jobs and then trusted to do so, they perform at higher levels and better efficiency. Micromanaging employees has the opposite effect.
When you hire an employee, you must trust them to do the job. While you should train and guide them on the steps to take to accomplish the job, you should also believe that they can determine the individual steps as needed. If you don’t trust them to do the job, they may be the wrong employee.
Give Fair Feedback
Providing both positive and negative feedback to employees is part of your job. It may not be your favorite, but it is still a crucial component of employee management.
With every employee, be fair. If, for example, you are discussing an employee’s repeated tardiness, mention that it violates your company attendance policy to be late. Also, ask if there’s anything you can do to help. Maybe they were having car issues or had a sick child—it is possible that they have a perfectly good reason for their tardiness, and by being fair to them, you demonstrate your flexibility.
Understand Legal Issues
Managers are on the front lines to ensure a company adheres to state and federal labor laws and must understand how to follow them. Otherwise, your business could face serious legal consequences.
You cannot discriminate against employees based on:
- Race
- Color
- Religion
- Sex
- National origin
- Age
- Immigration status
- Genetic information
- Disability
If you are disciplining employees who fall into one of the above-protected classes but other poor-performing employees are not receiving the same treatment, you could open yourself up to legal liability for workplace discrimination.
You must take care to ensure that you treat each employee fairly and equally. That’s why it is in your best interest to have clear employee management policies and procedures in place for you to follow each time. This can help you avoid legal scrutiny and claims of workplace discrimination.
Above all, remember that what you do for or to one employee, you must do for or to all. Have a policy and rigorously stick to it.
Employee Management Frequently Asked Questions (FAQs)
The key is to address issues promptly through private, constructive conversations. Managers should document specific instances of poor performance and work collaboratively with the employee to create a clear performance improvement plan with measurable goals and realistic timelines. Regular follow-up and proper documentation of all discussions are essential, and HR should be involved when appropriate. Drive positive change to your employees—learn effective feedback techniques and how to create successful performance improvement plans.
I suggest conducting performance reviews quarterly, paired with regular informal check-ins and real-time feedback throughout the quarter. This ongoing dialogue helps prevent surprises, maintains alignment with company goals, and allows for timely course corrections when needed.
Increasing employee engagement starts with employee management. By being actively involved with the success of your employees, you show them that they are a valued part of your company. This will automatically result in increased employee engagement.
Successful employee retention strategies typically combine competitive compensation with clear career advancement opportunities and regular professional development programs. A positive workplace culture, flexible work arrangements where possible, and strong onboarding programs are equally important. Regular engagement surveys help organizations understand employee needs and concerns, while recognition programs help staff feel valued and appreciated. Implementing these elements creates an environment where employees are more likely to stay and thrive long-term.
The best approach to handling workplace conflict typically involves meeting with each party separately first to understand their perspectives, followed by facilitated discussions if necessary. Make sure that the focus should remain on the facts rather than emotions, and clear solutions should be established with specific expectations.
