What Is People Management?

People management is the practice of directing all people-related tasks within a business. People management aims to get the right people in the right place at the right time to support the business’s mission. 

This includes developing current employees, all aspects of employee engagement, and following HR processes. Effective people managers will reasonably challenge employees within their team to help them grow and develop. 

Effective people management brings many benefits to a business. These include reduced employee turnover, improved employee engagement, and more effective team communication. 

Why People Management Is So Important

Your people are the most important part of your business. They serve customers, answer telephone calls, and keep the business running. Their performance is directly related to your bottom line, and influential people management will drive that performance. 

Successful people management results in the following benefits:

• Increased employee retention. Effective people management significantly reduces employee turnover. When employees are effectively managed, they are more likely to stay with a company as they feel valued and supported. 

• Increased productivity. Employees who are effectively managed will complete their work in a shorter time frame. This increased efficiency allows extra time during the work day, which can be filled with other similar tasks or dedicated to new projects, increasing productivity. Completing a higher volume of work to the same standards will also increase your company’s profitability. 

• More engaged employees. People managers who dedicate time and resources to developing their employees will build trust with their reports and department. This results in increased employee engagement and more motivated employees.  

• Internal recruitment opportunities. A good manager will challenge their employees and support their growth, helping them to become the best employee they can be, and even making them eligible for promotions.  

• Increased profitability. Effectively managing your employees will boost productivity, prevent costly mistakes, and increase employee retention. It is estimated by E. L. Goldberg & Associates that replacing an employee costs between 33% and 200% of an employee’s annual salary. These savings alone can help increase profitability. 

What Makes A Good People Manager?

Good people managers attract hard-working, high-performing employees. The best managers connect their employees with the business’s mission and ensure that all employees work towards a common goal. Their teams work in high-performing, feedback-rich environments where they feel psychologically safe and motivated. 

Ensuring your employees are motivated is an essential aspect of people management. Employees need to see how their role helps the business achieve its goals. Building strong working relationships, providing regular feedback, and having honest conversations with your team will help keep them motivated.

Key People Management Skills

We’ve listed some of the most important skills exhibited by great people managers and included some actionable tips to help you use these skills in your workplace. 

Emotional Intelligence

Emotional intelligence is the ability to recognize, understand, and manage your emotions and the emotions of those around you. 

Emotional intelligence is an essential skill as a manager, as it can help you understand your employees’ emotions and recognize how these will affect their work day. Having a high level of emotional intelligence will also increase self-awareness and allow you to think before you react to challenging situations.

Indra Nooyi, CEO of PepsiCo, is a manager with a high level of emotional intelligence. After spending time with her parents in India, Nooyi was able to recognize that her parents were just as much a part of her success as she was. 

Because of this realization, Nooyi wrote letters to the parents of each member of her executive team, many of whom said they were honored to have received one. This profoundly personal connection Indra had built with her employees developed trust and loyalty, which trickled down through the business. Nooyi left PepsiCo with a 75% approval rating and a legacy that was hard to forget.  

Actionable tips:

• When managing people, taking advantage of diverse perspectives is essential. Ask your team how they would approach a problem. What do they feel they need to succeed? By asking more and directing less, you can create an environment where everyone can share their ideas and coach each other to succeed.
• Actively listening to what your employees tell you is a great way to practice emotional intelligence. Listen to understand, not to respond. 
• Practice mindfulness. Checking in on how you’re feeling and what made you feel that way is a great way to understand your emotions.

Business Acumen

Business acumen refers to business sense and understanding. It’s the ability to see a problem’s ‘big picture’ and know how to resolve it in order to achieve your business goals.  

Business acumen comprises financial literacy, organizational knowledge, and self-awareness. It is an important skill in people management and can be built through experience and learning about business strategy. 

Actionable tips:

• Research is vital to growing business acumen. Sit in on a budget meeting with your business or read a financial newspaper. Learning about what other companies are doing will help you understand your competitors and inspire you to try new things. 
• Consider working with a business mentor who can help you see issues from a different perspective, helping you understand how to solve a problem.
• Developing a business strategy is a great way to increase your business acumen. Try asking yourself questions like, who are your key competitors? What are your most significant cost drivers? How does your team contribute to the company revenue line? Understanding the answers to these questions will give you a starting point to unlocking your business’s potential.

Delegation

Delegation is knowing what tasks you specifically need to complete, and what tasks you can ask your employees to complete. 

Delegation improves your team’s productivity. Plus, the responsibility required to handle these tasks will help them develop in their career and stay motivated and engaged. 

Actionable tips:

• To avoid micromanagement, set a task for your employee and ensure they are clear on the outcome you’re hoping for. Then, give the employee space to complete the task unless they ask for additional support. 
• Delegate tasks within your employees’ strengths. For example, employees with a natural flair for relationship-building should be involved in recruitment tasks. This will boost morale and help them feel like an essential team member. 
• Following up on the tasks you assign your employees is essential to delegation, as it develops trust and fosters a culture of discipline amongst your employees. There are different ways to follow up with your team, ranging from weekly meetings to casual 1:1 conversations. Choose the method that best suits the needs of your business, your personal style, and the people you work with.

Courage

Having difficult conversations and making difficult decisions is challenging and requires courage. So does changing your business structure or operations. Firing a team member is uncomfortable and requires courage to see it through. 

A courageous leader will also instill courage in employees and encourage them to speak up when they feel something is wrong. This will develop a high-performing workplace culture. 

Actionable tips:

• High employee morale is crucial to success. If you begin managing a team that doesn’t have a great culture, try organizing something fun for your team to do, like an office baking competition or team building exercise to raise morale. 
• Acknowledge your nervousness when making tough decisions and embrace it. Being out of your comfort zone means you are growing as a leader and manager. 
• Learn when to say no to both senior managers and colleagues. Part of people management is setting healthy boundaries around workload and having the courage to say no when boundaries are exceeded. 

Managing Vs. Leading

While often grouped together, there is a distinction between management and leadership. 

Management is concerned with managing employee processes and planning and performing tasks that help the business move forwards. 

Leadership is about creating positive change through social influence and relationship building. Leading your employees motivates them towards a common goal and maximizes efforts. 

While it is possible to be a manager and a leader simultaneously, it’s essential to strike a balance between supporting your team’s well-being and driving them to success.  

Managing At Each Stage Of The Employee Lifecycle

The employee lifecycle can be divided into three stages: pre-employment, employment, and termination. At each stage, you’ll need to utilize different skills and focus on different aspects of people management. 

Pre-employment

Pre-employment is the phase before an employee officially joins your company. This might include the hiring process—including interview and selection—employee onboarding and induction, and pre-employment checks. While this portion of the employee lifecycle takes place prior to a worker’s employment, it is critical to the success of your business and shouldn’t be overlooked. 

Hiring

The hiring process is crucial. This is your opportunity to bring the right people into your business. Follow the steps below to ensure you get the most out of this process and find the perfect candidate. 

Application process

Your first step should be putting out a job advertisement. You could list your job advert on a career-building website like LinkedIn or post the advert in your location’s window if you are in the retail or hospitality industry. 

You should encourage applicants to apply by sending their resumes to a secure portal or via email. To remain compliant with the Department of Labour (DOL), you must keep any interview or job application documents for one year after the interview date. You should either store these documents in a secure, lockable filing cabinet or a dedicated record-holding software like Connecteam.

Interview process

Once you have collected three to four promising resumes, you should begin planning your interview process.  

A robust interview process begins with preparation. This is your opportunity to bring the perfect candidate into your business, so you want to dedicate the proper time to this process to get the best outcome. 67% of candidates would be willing to decline a job offer after a poor interview. Planning a strong interview process will prevent this.

First, ensure you have a suitable, private room to conduct your interviews, such as an office or meeting room. You may need to book this room ahead of time to ensure it will be free. 

Once you have decided where your interview will take place, you should inform your candidate of the interview’s time, date, and location. Below is an email template you could use.

Dear [name],

Thank you so much for your interest in [position] at [company]. I am pleased to inform you that you have been selected for an interview.

I have scheduled an interview for you at [time] on [date]. The interview will be held at [location] with [name of interviewer], [position they hold at the company].

Please wait in the reception where [name of interviewer] will collect you. You should prepare for some standard interview questions about your CV and general background. 

Please respond to this email to let me know if you can attend. 

Please let me know if you have any questions or require any reasonable adjustments to attend the interview.

Kind regards,

[your name]

Once your applicant has confirmed attendance, you can start drafting your interview questions. These should be appropriate for the number of interview sessions you expect to have. For example, if you’re hiring for an entry level position, you should not need more than two rounds of interviews. However, you may need more interview rounds to help you make your decision if you’re hiring a senior manager.

Your questions should also reflect the qualities you are hoping for in a candidate. Read through the job specification and tailor your questions appropriately. For example, if you’re hiring for a barista, you may ask questions about previous experience with coffee machines and customer service skills.  

Make notes about the candidate’s responses throughout the interview and mark them out of three. A score of one (or zero) might suggest the employee did not have a strong example or did not answer the question.

A score of two indicates an acceptable answer with room for improvement. A score of three suggests an excellent response with situational examples. Using this marking scheme with set criteria for scoring will contribute to a fair interview process and help you during the selection. 

Selection

If you follow a robust interview process with a transparent framework, the selection process should be simple—you just pick the candidate with the highest score. Once you have decided who you will hire, you should inform all the unsuccessful candidates and offer feedback. While it isn’t nice to hear you have been unsuccessful, offering constructive (but kind) critiques of their performance will help candidates improve for their next interview.

Communications

You should communicate clearly with successful and unsuccessful applicants. If you don’t inform candidates of your decision, they may harbor resentment for your company which has the potential to damage your brand. Everyone who applied, whether invited to interview or not, should be clear on their employment status.

Consider calling candidates to break the news and following up with an email to confirm your decision. Taking the time to contact candidates will be appreciated. 

Pre-employment checks

Once you have interviewed and selected your successful candidate, you can move on to pre-employment checks. Pre-employment checks are a crucial aspect of onboarding and people management, as they ensure that candidates have the experience they say they do. Follow the below steps to manage this stage of the employee lifecycle successfully. 

Request references

Before offering the successful candidate the role, you should ask for two separate references—one professional and one character—from your candidate’s previous employers. This will ensure that your successful candidate has the experience they listed on their resume and confirm that they would be a good fit for your business. Academic references may be accepted if your candidate has just left school or college. 

Reference checks should take, at most, a couple of days. If they are taking longer, consider reaching out to the reference provider via telephone to speed up the process. If you find out that the candidate has not been truthful about their experiences, try reaching out to the candidate to understand why. Unless there are exceptional circumstances which account for why the candidate was untruthful, you should select a different candidate from your interview pool.

Employee eligibility and tax forms

You must ensure that your employee is eligible to work in the USA and then fill in a Form I-9 that confirms your new hire is authorized to work in the United States. 

Form I-9 shows that you have completed your due diligence, and contains all necessary information for the Department of Labor. This form must be stored for three years and kept separately from employment records. The employee must also complete the appropriate tax forms (typically a W-4 for full-time employees) and company documents such as non-disclosure agreements, health insurance contracts, or other benefit documents.

If your employee is not eligible to work in the USA, does not produce the correct documents, or does not fill in the correct documentation, you must withdraw your offer of employment immediately. 

Issue contract

Once you have completed your checks and the employee has completed all necessary forms, you can issue an employment contract to your candidate. Ensure that your employee’s contract contains all the tasks they will be expected to perform and information regarding their pay and benefits. Your HR or legal department should issue the contract. As the manager, it is your job to ensure it is signed and returned in a timely manner.

The contract should be issued with the employee handbook, which the employee should read and sign. Be prepared to answer any questions they may have about their contract or handbook. 

Store signed documents in a safe place

In line with the DOL, job application and interview documents must be kept on record for one year. Tax documentation such as W-4s and W-2s must be kept on file for four years. You should store these documents in secure document-saving software.

A robust record retention software will back up any HR and payroll documents to the cloud. You should also be able to decide who can access your employee’s confidential documentation and easily view each digital document. 

Onboarding

Once you have completed all pre-employment checks, you can move on to onboarding your employees. This is a critical aspect of managing the employee lifecycle, as you want to ensure the best possible start for your employees.

Training

Ensure your employees get the proper training before starting their job. Employees who are not trained appropriately for their roles will leave shortly after hiring. This will undo all your hard work from the recruitment process and ultimately cost your business money.

Good workplace training may combine digital learning, on-the-job training, or classroom learning. A good induction should last between one and two weeks and should teach your employees everything they need to know about your business. You must set clear training expectations based on the job criteria and tailor the training to these.

Of course, much on-the-job learning will happen after the induction period, and you must be supportive of your employee during that time. Consider setting a probationary review period and having regular catch-ups with your employee. This will help your employee assimilate with your business and its culture. 

Employee culture

Introducing your new employee to the employee culture is just as much a part of their training as classroom learning. Consider holding a team building day during their induction or allowing extra long lunches for the team so everyone can get to know each other in the breakroom. You should also introduce your employee to your core values, company mission, and vision to help them understand your priorities. 

Make yourself available for questions.

Your employee will have lots of questions after their induction and training process. Make yourself readily available to your new hire so they can ask you any questions. Remember, no question is a silly question in your first week. 

Employment

Once you have completed all your pre-employment checks and onboarding, you should treat your new hire as an employee. Several tasks are carried out by a people manager, however, the below are likely to take up most of your time. 

Employee welfare

Managing your employees’ welfare is an integral part of your role as a manager. Encourage a culture of openness and honesty amongst your team. This will ensure that they will come to you if they have a problem.

To promote this culture, try being open with your team about your life and struggles. While it’s essential to keep your relationship professional, talking to your employees about some personal matters will show them that it’s ok for them to open up. Employees that feel emotionally supported in the workplace are more likely to stay with their current company than those who do not. 

Performance reviews

Regular feedback and employee recognition are essential to keeping employees motivated and challenged in the workforce. Development-oriented employees want to feel like they are growing in their roles, and a manager who is invested in their growth is key to fostering that development. By offering regular feedback and recognition, managers can support a company culture of ongoing talent development.

In addition to providing regular feedback, it’s essential to have regular performance reviews with employees so you can discuss their work openly and honestly. This way, the business and the employees clearly understand role expectations. If performance reviews are not held regularly, tracking an employee’s progress and meeting company expectations can be challenging.

Benefits

Benefits are an important part of your employee’s remuneration package. It’s important to offer competitive benefits to attract and retain the best employees. Although some benefits—like health insurance and 401k matching—can be costly, plenty of other benefits are more affordable. For example, you could give employees a monthly stipend for a gym membership, a car allowance, or pay for their home internet connection. 

You could also provide an unlimited paid time off (PTO) allowance, grant access to a meditation or mindfulness app, offer free coffee in the office, or commit to providing flexible work hours. By providing the best benefits that you can afford, you’ll be able to attract and retain the best employees.

Termination

Whether termination is voluntary, a redundancy situation, or you have to fire an employee, losing a colleague you’ve invested time in is never easy. While it is not easy to lose an employee, managing this process effectively is crucial to positively ending your employee’s relationship with the business.

Voluntary

If an employee resigns or quits, you should thank them for their time with your company and agree on an amicable leave date. You should decide on the type of references they will need for their next employment, and arrange for them to return any company property.

If an employee voluntarily leaves your business, it’s good practice to find out why. An exit interview should be scheduled in the employee’s last week of employment. Use exit interviews to learn more about your company culture and what it’s like to work there from the employee’s perspective.

When employees are leaving, they’re usually more candid about their experiences. Ask them about their managers, jobs, working conditions, benefits, and why they decided to go. Listen carefully and take feedback or criticism constructively.

Firing an employee

Firing an employee is never easy. However, sometimes it’s what’s best for all parties.

There are several reasons why you may need to terminate an employee’s contract, including issues with attendance, conduct, or capability. While it’s always best to explore options to support the employee first, sometimes it’s in the best interests of both parties to end the relationship. If an employee is not meeting the expectations set out in their contract or if they’re not a good fit for the company culture, termination may be the best option.

Before you consider firing an employee, you should give them an official warning and support them through a training program first. This may be done through a disciplinary process. Usually, if an employee is bad enough to get fired, their behavior will have been unsatisfactory for a while. So, it’s essential to be honest and talk to them about the problem as soon as possible and give them a chance to improve.

If it is an exceptional circumstance, i.e., gross misconduct, or your employee has already been issued a warning, then firing the employee may be your only option. 

Developing A People Management Strategy 

Whether you’re about to start managing a new team or you’re ready to try something new with your current team, having a robust people management strategy is key. A pre-planned strategy can help you feel confident and in control of your team. 

Consider the following points to plan a great people management strategy:

When joining a new team or working with an established team, you should first look at the people. It’s a good idea to observe your new team for a minimum of a week before making any changes. This will help you understand team dynamics and identify any areas of opportunity. 

People management is about getting the right people in the right place at the right time. Is that true of your current team? If not, consider the following:

• What skills do they need to make them the right people? 
• Do you need to hire additional people?
• If so, what recruitment gaps do you need to fill?
• How are their inter-team relationships?
• What is the team culture like?

Answering these questions will help you understand what more needs to be done to build an effective team. Building strong, genuine working relationships is one of the most important factors in people management. When you start managing a new team, the people should be your first priority. 

Continual development is vital in helping your team be the best they can be. Use your people management strategy to identify training gaps or skills your team needs to get them to the next level.

Ask yourself the following questions:

• What additional training do the employees need to be successful in their roles?
• Have they completed all their mandatory training, for example, compliance training? 
• Who are your future leaders? 
• What skills do they need to get them to the next stage in their career?

Answering these questions will help you to plan a timeline for training and development to grow your team’s capabilities. 

From training and development, you can move on to performance management. Unfortunately, the reality of taking on a new team is that there may be underperforming staff members. Measuring your team’s performance will help you understand what feedback to give and how to support them. 

When planning for performance management conversations, ask yourself the following questions:

• When did the employee last have performance conversations? 
• What training was provided after this conversation?
• How does the employee rate their performance?
• Does their performance affect the team’s productivity or morale?

It’s a good idea to plan regular performance management conversations with your colleagues. Map them out in your calendar, so the time is pre-planned and accounted for. Making performance management conversations a priority with your employees helps them feel valued and will create a high-performing culture where feedback is regularly exchanged. 

Employee engagement should be an essential aspect of your people management strategy. It’s a good idea to start by measuring current employee engagement. Try sending out an anonymous survey to gauge how your employees are feeling. From this, you can consider the steps you need to take to boost employee engagement. 

To make an immediate difference in employee engagement, try the following tips:

• Provide regular, on-the-spot feedback to help employees understand how their work fits the broader business goals. 
• Ask employees their opinion about upcoming projects or tasks. Ask them how they would handle an issue and thank them for their opinion. 
• Consider holding a team building day or even a fun event, like a pizza party. Small acts of appreciation will go a long way in helping your team feel recognized. 
• Try rewarding your employees for a job well done by designing a rewards program. Employee rewards have been shown to boost employee engagement and productivity. The reward doesn’t have to be big—something as small as a casual dress day or work-from-home day are effective ways to reward employees.

Recognizing your employee’s contributions is the final aspect of planning a people management strategy. Recognition ties in with employee engagement, as employees whose contributions are recognized and appreciated feel more engaged. 

Try the following to increase employee recognition:

• Ensure that you recognize your employee’s contributions, no matter how minor. 
• Ask employees whether they feel recognized. If they do not, ask how they would like to have the contributions recognized and adjust your communication style. 
• Consider giving a holiday gift to your employees, such as a $5 gift card or personalized mug. This will help your employees feel valued. 

Conclusion

People management is the practice of managing all people-related tasks in your business. While leadership and management are used synonymously, they are different things. However, to be a great people manager, you also need to be a strong leader, and having a good people management strategy can help you achieve this. 

A great people management strategy will consider your team as a whole. You must look at your team’s relationships, training, performance, recognition, and engagement. As a people manager, you are responsible for all of these.

The most important skills to develop as a people manager are emotional intelligence, business acumen, delegation, and courage. These will help you manage your team compassionately and strategically and achieve the best possible results.