7 Most Frequent HR Mistakes & How to Avoid Them

What if you could anticipate – and avoid – your next HR debacle?

Outdated policies and inadequate documentation can cause even the strongest companies to stumble when it comes to HR issues. When was the last time you updated your employee handbook? Are you sure it covers everything it should? Do you have a policy in place for handling employee complaints? Slip-ups in hiring, firing, employee paperwork and other areas can stymie your company’s growth.

Get the insight you need to become more proactive when it comes to managing HR policies and procedures. Access this e-book to get strategies from industry experts that will help you spot the most common HR breakdowns.

In this e-book, you’ll discover:

How an outdated employee handbook could lead to costly mistakes
The documentation you must have before firing an employee
Why you can’t afford to skip pre-employment screenings
What employee records you’re required (by law) to have on hand
Why onboarding training is particularly important
A simple fix to avoid costly payroll errors
Policies that protect your company’s safety and financial success

Avoid HR pitfalls and start mastering the tactics you need to run a blunder-free business. Download this e-book today.

Mistake #1 – Forgetting to update your employee handbook

The employee handbook provides a firm foundation for your overall business. It’s more than a how-to manual for how work is done. It’s a living document where policies, procedures, working conditions and expectations are defined.

Whether you have an outdated employee handbook or none at all, take a look at what you may want to include:

Social media guidelines
Communications policy
Statement of company culture
Nondiscrimination policy
Anti-harassment policy
Attendance policy
Professional conduct expectations
Code of ethics
Safety guidelines

Employee handbooks can help small businesses avoid misunderstandings and minimize their risks regarding employment-related lawsuits and claims. These claims often stem from inconsistent treatment of employees or a lack of clarity in policies and procedures.

Handbooks that outline policies and guidelines not only provide expectations for employee conduct, it also creates a framework to guide management and leadership – helping to ensure policies are enforced appropriately and evenly across departments.

Mistake #2 – Lack of documentation for performance-based termination

Having candid conversations with employees who aren’t performing well isn’t easy. But documenting those employee performance conversations is important, especially when terminating the employee is the result of continued poor performance. What you need is a progressive discipline policy. While it provides employees an opportunity to improve their performance, it also can support decisions to terminate or demote that employee.

If you don’t have the documentation that shows a pattern of poor performance, small businesses may open themselves to liability issues such as a wrongful termination or discrimination complaint.

Steps to follow in a progressive discipline policy:

Verbal warning – Discuss the specifics of the employee’s poor performance. It is a verbal warning, but it should still be documented and put in the employee’s personnel file.
Written warning – Meet with the employee and a member of HR. Give written information detailing how the employee hasn’t performed, the expected course of action and consequences of noncompliance. This is signed by all meeting attendees.
Final warning – Similar to the written warning meeting, but with the condition that any further performance issues will result in termination. Signed by all attendees.
Termination – This is a meeting where you notify the employee of termination. Provide a written, dated document that goes over final pay, collecting company property and retrieving employee’s personal items.

Mistake #3 – Mismanaging employee data

Employee records and human resources administration can seem time consuming. But proper employee recordkeeping can help keep you in compliance with regulatory agencies.

Oftentimes, employee records include sensitive information such as:

Driver license number
Passport copy
Social Security number
Bank account information
Health or medical information
Personal contact information

Mishandling this information ranks high among bad HR practices. Managed improperly and releasing it to the wrong people could put an employee at risk and your company in hot water. You’ll need to have protocols in place for collecting, storing and maintaining sensitive employee information.

Something to note: Under the Americans with Disabilities Act, medical information must be kept confidential and separate from other personnel information.

In addition to having a secure system, employers should conduct audits of employee files to ensure they are thorough and up to date.

Items to keep in an employee’s personnel file:

Job application
Resume
Benefits enrollment papers
Background check information
Offer letter
W-4
ADA paperwork
Drug-testing consent and results
Personal or family medical leave (FMLA) information
Doctors’ notes
Workers’ compensation documentation
Employee reviews
Counseling documentation
Training records
Confidentiality or noncompete agreements
Employee handbook acknowledgement

Employees should also have sufficient and easy access to their own data and files. For more on this and other HR mistakes that businesses make, download the e-book.

Mistake #4 – Outdated interview and hiring processes

There’s a lot to consider when trying to avoid the pitfalls of bad human resource practices – including how you’re hiring new employees. Your interviewing and hiring process need to be deliberate, purposeful and consistent.

Here are some factors to consider when hiring:

Skills – Does your new hire possess the basic skills to carry out the job functions. What soft skills, such as negotiating, persuading or emotional intelligence, do they have?
Job experience – What is their job experience? How has what they’ve done in the past going to benefit your business in the future? How much training will they need?
Education – Do they have the education necessary to perform the duties?
Team relationship – Can they work alongside others, if needed, to reach a common goal? How will they fit in with the current team?

In the interview, asking questions that can help you spot potential red flags is key to a successful hire. It also allows you to know if the candidate would be a good fit with the team.

Topics you may want to consider covering in the interview process:

Adaptability – You want to find out how they resolve a tough situation or how they handle change.
Customer service – How do they handle difficult customers?
Dependability – You’re looking for commitment and a sense of responsibility.
Initiative – Are they willing to take an opportunity when it’s presented?
Interpersonal skills – You want to know how they handle conflict with others and their work demeanor.
Judgment – Ask about how they make difficult decisions.

Some interview questions that should be off limits:

How old are you?
What’s your religion?
Do you have any illnesses that may keep you from performing this job?
How much do you weigh?

Mistake #5 – Lack of job training

For employees to grow with your company, they’ll likely need professional development somewhere along the way. Training and development can range from helping employees develop skills – think Excel or WordPress classes – to providing tools and training to become a great leader. Unfortunately, lack of job training is among the bad human resources practices that businesses fall into.

Training begins when an employee joins your team in the onboarding process. Proper onboarding training sets the right expectations and can prevent issues later. You’ll want to introduce your company culture, mission, vision and expectations.

Within your workforce, you might also find employees you want to develop into the company’s next leaders. One big HR mistake small businesses make is promoting workers without adequate management training. You can’t just take that outstanding employee and drop them into a leadership role. Here are some skills you’ll want to impart:

Team building
Coaching and visioning
Negotiation
Conflict resolution
Communication

Mistake #6 – Unclear company policies

Clearly defined HR policies are fundamental to your company’s success. They protect your business and education employees about what is expected. Here are three policies that may slip through the cracks when you’re developing yours.

Vacation payout policy. Many states require employers to have a policy regarding the payout of unused vacation or paid time off. If you lack a policy regarding unused PTO, you may end up paying more than you anticipated when an employee leaves your company. Download the e-book to discover where to find out about your state’s specific rules.
How to file a complaint. Your business should have a complaint process that allows employees to express concerns about work-related issues. This can help manage liability as well as alert management of a problem before it escalates.
Disaster and workplace violence. A disaster recovery plan should include training for and how your business will respond to crisis events such as natural disasters or workplace violence.

Mistake #7 – Disregard for employment laws and regulations

Keeping up with employment laws can be overwhelming for small business owners. But ignoring HR compliance and employer liability can lead to costly litigation and penalties. Here are some key areas and agencies where keeping track of employment laws and regulations is essential.

FLSA: The Fair Labor Standards Act gives employees basic rights and wage protections, including specifications on federal minimum wage, job classifications and overtime requirements.
OSHA: The Occupational Safety and Health Administration sets and enforces standards for safe working conditions and provides training, education and assistance to support those standards.
IRS: Conforming with Internal Revenue Service regulations includes items such as filing business taxes and reporting annually the health coverage offered to full-time employees.
Department of Labor: The Wage and Hour Division is the primary enforcer of FLSA provisions related to worker classification. Nonexempt employees must receive overtime for any hours worked beyond a 40-hour workweek. Overtime pay cannot be less than 1.5 times their regular pay. If you are audited, misclassifying employees can be a costly mistake.