3 Promotion Mistakes Your Small Business Can Avoid

These are easy traps to fall into when managing a workforce. Being aware of them will help you harness the flexibility of your small business.

By Daniel B. Kline, The Motley Fool

Running a small business requires a level of finesse when it comes to managing employees. You don't have as many options to offer career growth as bigger players do, and you may not have a deep bench to replace people when they leave or move up.

Managing these situations requires you to take an active role in working with your employees, straddling the fine line between what's best for the company and the employee's interests. That can lead managers and owners into a number of workplace traps. Avoiding these may cause some short-term pain and require some effort, but you'll be better off retaining top talent in the long run. Here are three promotion pitfalls to look out for.

1. Not promoting someone because they're good at their job

Sometimes you have a person who fits their role perfectly. He or she knocks it out of the park every time, in a job where they're hard to replace (or where others have failed). That can make it tempting to keep that person rooted in that position when a promotion opportunity presents itself and the worker is deserving. 

It's easy to leave someone where they are, especially if they're filling a job that's tough to restaff and keeping that person in their existing job will avoid short-term interruptions. But passing over deserving employees for a raise or promotion, will ultimately make cherished employees become dissatisfied and could result in them quitting or starting to slack off.

Instead of not promoting the person, discuss the dilemma with the employee. In many cases, the person will happily train a replacement, or keep an eye on their old job during a transition into their promotion. Be open to all reasonable solutions that work for both company and employee.

2. You over-promote people

In my family's ladder and scaffolding business, being a good truck driver was often a path to being promoted to inside salesman. Sometimes that made sense -- many truck drivers learned the product well, and had the right personality to handle customers. Many, however, did not. They were great at their job -- driving a truck and making deliveries -- but they did not have the right skill set to make sales.

In cases like this, it might be best to leave someone where he or she is, or wait to give them a promotion that better fits their skills.

3. You have a rigid philosophy

Small companies should be flexible in ways bigger companies aren't. A worker may come to you with a proposal that deviates from how you have operated in the past. Don't automatically dismiss the idea simply because it's a novel way of doing things.

Work with the employee and talk the idea through. Perhaps you don't accept their idea entirely, but you approve some aspect of the plan, or suggest a starting point to try. Even if you say no categorically, make sure the employee feels valued and heard for making the suggestion.

Use size to your advantage

Large companies struggle with finding creative ways to make sure employees are happy and well-suited for their roles. However, you as a small business are offered the flexibility to try something new, like pairing two workers to split two jobs between them, parceling out tasks based on their skills and desires.

Tackle each employee issue using every tool available. Be creative and open to solutions that might not work at a bigger company. And, perhaps most importantly, listen to your employees so you can work together to find ways to move forward.


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Finance Magazine: 3 Promotion Mistakes Your Small Business Can Avoid
3 Promotion Mistakes Your Small Business Can Avoid
These are easy traps to fall into when managing a workforce. Being aware of them will help you harness the flexibility of your small business.
Finance Magazine
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