HRM textbook

620 PART 5 EMPLOYEE RELATIONS
employee IRAs. These plans are for employers or small businesses with 100 or fewer
employees and no other retirement plan.
SIMPLE IRAs are inexpensive and simple. The owner contacts an eligible financial
institution and fills out several IRS forms. The IRS needs to have previously approved
the financial institution. However, banks, mutual funds, and insurance companies that
issue annuity contracts are generally eligible. 52 The plan has very low administrative
costs. Employer contributions are tax-deductible. 53 A typical employer contribution
might match employee contributions dollar for dollar up to 3% of pay. The financial
institution usually handles the IRS paperwork and reporting.
Improved Communications
Effective communications are especially important in small businesses. With a
thousand or more employees, one or two disgruntled employees may get lost in the
shuffle. But with 5 or 10 employees, one or two disgruntled employees can destroy
the business s service. That s why simple programs, like the one in the accompanying
HR as a Profit Center feature, are important.
HR AS A PROFIT CENTER
IHOP
Half of all restaurant employees are less than 30 years old, and turnover of more than
100% per year is the norm. 54 So, when Joe Scripture, whose company runs 11 IHOP
restaurants around Atlanta, looked at the industry s turnover statistics, he knew
he and his partner needed to do something to get staffing costs down. But what? 55
Seeking to shield their 11 IHOP restaurants from the industry s sky-high turnover
rates, the owners hit on an HR solution. They dramatically reduced turnover with a
new online system that lets new employees anonymously report their opinions
about the hiring process. 56 Feedback from that simple communication tool enabled
them to recalibrate their firm s hiring, training, and orientation methods, and
to reduce turnover by about a third.
NEWSLETTER Mel s Gourmet Diner in Bonita Springs, Florida, keeps employees
informed with a quarterly newsletter. It distributes copies at the chain s 10 locations,
but also posts it on the company Web site. It sounds like a cliché, but our people are
the keys to our success, says the owner. We want to make sure we give them all the
information and tools they need. 57
ONLINE Each time employees of Tampa, Florida based Let s Eat! go to one of the
firm s computers to input a guest s order, they can quickly review the chain s menu
changes, special promotions, and mandatory employee meetings. 58
THE HUDDLE Sea Island Shrimp House in San Antonio, Texas, keeps employees in its
seven restaurants communicating with its cascading huddles. As in football parlance,
the huddles are very quick meetings. At 9 A.M. top management meets in the first of the
day s huddles. The next huddle is a conference call with store managers. Then, store
managers meet with hourly employees at each location before the restaurants open, to
make sure the news of the day gets communicated. It s all about alignment and good,
timely communications, says the company. 59
Fairness and the Family Business
Most small businesses are family businesses, since the owner (and often one or more
managers and employees) are family members.
Being a non-family employee here isn t easy. The tendency to treat family and
non-family employees differently can undermine perceptions of fairness and morale.