Managing people is always a challenge, and most business owners and middle managers learn by trial and error. Unfortunately, this is not always the most efficient method of learning new skills. I am confident you may see yourself when reviewing the following list of common mistakes mangers make.

Mistake No. 1: Expecting employees to think like owners.
Employees, supervisors and managers who work for you are not owners. They will never think and act like you. If they did, they would be your competitors, not your employees. As frustrating as this may be, it is a simple reality. Accept it.

Mistake No. 2: Thinking out loud and making inappropriate comments.
Running a business is a lonely proposition, and we all want someone on our side. Talking out loud before thinking things through can get you into a lot of trouble. People tend to remember the good part of what impacts them and may forget or minimize what they need to do to reap that reward. For example, if you have someone who may take over the business one day, never tell the person that news prematurely. Instead, put them on a career and skill path that enables them to learn the skills they need. If you are thinking of changing employee benefits, think it through before talking about it. If you are lonely, get a dog and take it for a walk; don’t use your employees as a sounding board.

Mistake No. 3: Being buddies with your employees.
Buddies are people we hang out and socialize with. Friends are people we care about and respect. Some people can separate socializing with the boss from work, while others cannot. You can’t predetermine who can and cannot deal with such fraternizing. Being buddies with people at work might be OK when things are going well at the company, but if the going gets rough, then your social life and work life will both be in a rut. This does not mean you cannot be friendly, respectful and like your employees. It is always better to work with people we like. It just means that socializing too much is not a good idea. People need owners to be leaders, not buddies.

Mistake No. 4: Hiring too quickly and firing too slowly.
Most contractors do not take the time required to fill their constant demand for employees. This causes a situation in which many contractors hire warm bodies with performance issues and then tolerate poor performance. Always be on the lookout for people and be more careful of whom you hire. Terminate the bad seeds sooner and be less tolerant of their poor performance. Building an organization is an ongoing, time-consuming proposition.

Mistake No. 5: Taking the easy way out by hiring family and friends.
If many of your employees know each other intimately and are family members, personnel issues can become more complex and difficult. Firing one person can lead to firing half of the company. This situation can be avoided by establishing a system whereby you are always recruiting and developing people. Also, being aware of the possible problems these relationships may cause and managing with clear expectations can help. If you fire someone’s son or best friend, don’t expect them to automatically side with the company.

Mistake No. 6: Failure to hire people with a good work ethic.
Work ethic is a family value people learn at a young age. If you hire people with work ethic issues, you are going to have work ethic issues throughout their employment. Instead, try to hire people who will work hard and then teach them the required skills. Don’t just believe me. Write down all the people you have terminated in the last year. I’ll bet the vast majority of them were fired over work ethic issues such as tardiness, sloppy workmanship, a bad attitude, absenteeism, etc.

Mistake No. 7: Messing with people’s pay.
People will forgive you for a lot of things, but cutting their pay is not one of them. If you are going to start a bonus plan, commission plan or simply a raise process, think it through before doing it. Correcting pay mistakes is painful and messy.

Mistake No. 8: Failure to establish clear performance expectations.
Assuming employees know the meaning of a good performance is a huge mistake. What might look like doing a “good job” to you can mean something totally different to your employees. As an experiment, tell your teenage son or daughter to do a good job of cleaning up their rooms. I’ll bet their definition of doing a good job is different from yours. Setting measurable performance standards and communicating them with employees builds a better organization.

Mistake No. 9: Failure to have a fair and current compensation system.
Contractors tend to hire employees as they need them. Many also do a poor job of reviewing employee performance and giving raises. This can cause some devastating personnel results. Take a piece of paper and list your best employees in order of performance. In other words, who would you lay off first, who would you layoff second, etc. Now list their hourly pay beside their names. Do the two lists match? If not, you may have a merit pay issue.

Failure to keep aspiring employees current with local pay rates may mean the only way they can obtain a raise is to quit. The devastating result of this is a revolving door where your leaders of tomorrow are constantly leaving. It also can make it extremely difficult to recruit new people. If you are starting helpers at $8.00 an hour and fast food starts them at $8.50, you are going to have a hard time recruiting people.

Mistake No. 10: Not training and developing leaders.
Personnel and recruiting practices can be overwhelming, and frustrated contractors may want to stop trying. An excellent strategy is to bet on your foremen, lead people and middle managers. Develop a program where key people learn new skills and are more company oriented. Such development can help offset other employee issues.

Don't Learn the Hard Way

In summary, people management is never easy, and most of us learn by trial and error. Avoiding the above mistakes may make your management life a little easier. As frustrating as it might seem, people are a necessary part of contracting. For contractors, not working on employee practices is like a chef saying he does not like food. No matter how frustrating it might be, your business is only as good as your employees.