Business management combines an interesting mix of theory and practice, and it is a particularly good topic for management and entrepreneurial types to study. Finding a business management style that suits your personality and the nature of your business is both important and worthy of time investment, as being self-aware and being able to identify strengths and weaknesses of various approaches will enable more effective personal development and ultimately more effective management.

While many have their own individual business management styles, these are traditionally broadly categorized into three main classes of business management approaches.

Autocratic Management

Firstly, there is what has come to be known as the autocratic approach to management, which installs more trust in the leadership as opposed to the individual staff. This involves pulling rank and leaves employees in no doubt as to whom the management is or what decisions are being made. Rather than engaging employees within the decision making process, this business management style typically concerns businesses that require direct, effective leadership to produce results, often under pressure of working in a tough environment. Upon hearing the term autocratic, many tend to visualise a dictatorial approach to management. While that is perhaps the case, it is seldom as strict as this and it is often a necessary management style, for example in the armed forces or in a high-paced trading environment, where there is no margin for deliberation and group consideration.

Democratic Management

Alternatively, there is a business management style known as the democratic style, where employees are effectively engaged in consultation before decisions are made. While some consider this to be more motivating and more enjoyable to work under, it does nevertheless have its own disadvantages. Giving employees a say may undermine the authority of the management, and may ultimately cause inefficiencies in the decision making process. It is also time intensive, and perhaps not as effective in larger organisations with thousands of employees. While of course at a board room level this kind of decision making goes on everyday, it’s one that works most effectively in slower paced business where decisions can be fully deliberated and considered.

Laissez Fair Management

An alternative to those two business management styles and the third main category is what’s known as the laissez fair management style. This is by definition a more hands-off approach to management, which puts the trust of running the business within the hands of employees themselves, and allows a greater degree of autonomy than would otherwise be the case. While this is strong in creative industries, some business people find that this style of management can lead to a fragmented approach to doing business and is less organised and perhaps less professional.

Whichever business management style you liken yourself to; there are advantages and disadvantages of that approach. What’s important is not that you recognise which of these categories you fall under, but rather that you’re aware of the improvements that can be made to make your management more effective and efficient while also improving the relationships you share with employees at all levels of the organisation.

The human resource function has gone from the traditional hire and fire role to a strategic partner at the table with finance, operations and other business centers that are not centers of profit for the organization. The job of HR, as is the job of all such departments, is to ensure that the business gets the most out of its employees. Another way to put this is that the human resource management needs to provide a high return on the business’s investment in its people. This makes it a highly complex function – because it deals with not just management issues but human ones as well.

These 2 polarities are not always easy to balance and the human resource managers specifically try to maximize output from employees by instituting various schemes and policies. The following are some of the functions handled by the human resources team.

Handle compensation and rewards:–

Human resources are responsible for tying incentives and rewards to certain positions and roles in order to maximize performance levels. This is a strategic thinking task because it affects every single person in the organization and has to be planned separately for each position, depending on level, department and goals. Some jobs need to be more goal driven, such as sales so salary can be basic but commission can form the bulk of the remuneration, leading to more incentive to work effectively and close sales. Some firms tie top management’s salary to stock price but this can be risky. It is up to human resources to structure this important aspect to everyone’s satisfaction.

Recruitment:–

Another important task handled by the human resource function is the selection and retention of employees. If the right type of employees does not enter the organization, its days are numbered, because people drive almost any type of organization towards success.

Performance management:–

Regular, balanced and systematic appraisals must be administered consistently in order to evaluate the performance of each individual in the organization. This allows human resources to pinpoint the weaknesses of an individual’s work style and the strengths. They can then share this information with the employee in order to affect a change in performance. This in turn will lead to more productivity and potentially better returns on human investment.

Point of contact:–

The human resource personnel form the point of contact for an employee with any type of difficulty or query about their remuneration or other aspects of employment with the business. It is essential for someone to be available to answer questions and provide guidance. This communicates to the employee that the business cares about his or her concerns and is available to address them.

Employee expectations:–

The human resources function fulfills a very important ‘soft skill’, unspoken task – that of balancing employee expectations and the organization’s expectations. Both need to be addressed and aligned for a business to be successful and one with satisfied employees. Only a content and motivated employee will deliver good work, so it is the job of human resources to keep track of the expectations of the employee and those of the organization to ensure both are met simultaneously.