Any business that survived 2009 is positioned to improve in 2010. Hopefully, lending will loosen up, enabling businesses to invest in equipment or facilities. Hopefully, job losses will halt, employment will tick up, and consumers will again have cash to spend.

If your planning for next year includes adding employees, it’s a good time to reflect upon your most important asset—human capital—and plan on how you’ll inspire your people to perform at their best, while keeping them enthusiastic and productive about their work and your company.

Effective teams of workers are not happy accidents. In the leadership role, business owners and managers directly affect the performance of their teams. Hiring the right people and placing them in the right position on the right team is a delicate, but necessary practice. If it’s done well, your business will run better and more profitably.

Asking the right questions starts before the hiring process does. Ask your current staff what additional personnel they would hire, given the chance. Ask what they need. Ask what’s working and not working in their current team relationships. Listen well, and ask for input. Have a brainstorming session. While your employees may not have all the answers—or even many usable ideas—it’s important they feel included in the process. And usually, the workers on the ground are acutely aware of what’s lacking in their world.

During the hiring process, look for attributes that will fit in well with established teams. This doesn’t mean that your staff cannot work with someone who doesn’t share their musical taste or hobbies. It’s good to have a diverse group of people working toward a common goal, so everyone contributes his or her strengths. While skills can be learned, enthusiasm, a positive outlook, and passion to do well cannot. Debbie Downers will often bring everyone around them down, too.

Acknowledge and quickly deal with conflicts as they arise. It’s part of gluing a good team together. Certain rules, like fostering a sense of mutual respect, should be adhered to. Let your team know that open communication is always okay, and they’ll be more likely to put conflicts behind them.

Take the time to find the best people, thorough sound procedures, including pre-employment screening. Turnover is costly both in terms of dollars spent and goodwill lost when team members have to deal with new hires more than they should. Nurture your new hires, integrate them fully, and provide all your people the resources they need to succeed. Spend time and effort in 2010 to keep your most valuable asset—your people.

Firing employees is not easy. For most employers, it’s not something done lightly, either—termination can have many consequences, from a decline in morale to litigation. While the tips presented here should not be considered legal advice, general knowledge and awareness is important, too. For dealing with a specific situation, a human resources professional or employment attorney can always be consulted for expert advice.

If you’re an employer faced with the unpleasant task of terminating a worker, consider the following ideas and tips to make the process a little easier on everyone:

1. Don’t do it alone: have a witness in the room. Whether it’s the HR director, the employee’s supervisor, or a non-management staff member—a corroborating witness will be handy if the employee decides to sue. A witness also discourages any allegations of misconduct, and can help keep anger in check.

2. Don’t fire anyone on their birthday: chances are slim that it would be, but it happens—and nothing makes an employer look more impersonal. During your due diligence and preparation phase prior to terminating, check the employee’s file and avoid the week around their birthday, if at all possible.

3. Compile the paperwork ahead of time: Pull together any agreements or waivers the person will need to sign. Have their final paycheck, or severance pay ready—or a document showing when it will be direct deposited to the employee’s account. Any written warnings or job performance evaluations should be handy, as well—in case you need to refer to them for specific reasons the termination is happening.

4. Be ready to give specific reasons for the termination, listing work performance issues—not personality or personal problems. And, be sure the employee knows for certain that they are being terminated. Then, listen patiently and answer questions. Don’t let the conversation go on for long, or over-explain or debate the issue. Let the employee know that the decision is final. Repeat the reasons you have prepared, if necessary.

5. Have an exit strategy: Disbelief and anger are natural. Some employees are embarrassed, and some become emotional. Allow the employee to vent or cry—and then give them time to pull themselves together. If the employee’s anger becomes unmanageable, have someone ready to step in and remove him or her from the room.

6. Don’t allow the employee to disrupt other workers: let him or her know they have a set amount of time to collect personal items, return company property, and leave. Keep an eye out for any trouble, but don’t feel that you must escort them from the building. It’s fine to end the termination on a pleasant note, if possible, by wishing the employee luck.

7. Inform remaining staff: While it is important to maintain the terminated employee’s privacy, his or her fellow workers need to be told about the situation. Just keep the details to a minimum; if the termination affects any remaining staff, let them know how; and if there is a replacement plan, share it. Don’t allow personal questions regarding the employee or the circumstances surrounding the termination.

No one likes to terminate employees. When it is necessary to do so, make it a little less painful by following these steps—and check with an HR professional for legal advice.

What makes employees happy and loyal? Company culture, extra perks, feeling appreciated by their employers—all of these factors are important, but they are not the deciding ones when employees are faced with the decision: “should I stay or should I go?”  The two things employees put at the top of the list are pay and benefits.

According to a survey conducted for the last three years by a Florida staffing firm, compensation and benefits are the most important thing in their relationships with their employers.

Although fewer workers have quit jobs this year (according to the U.S. Department of Labor), history suggests that workers who are unhappy will start looking for employment elsewhere as the economy improves. And the main reason they’re unhappy?  Their pay has been cut during the recession.

One study, conducted last May, showed that employees at 235 large U.S. firms are less committed to their employers—so those firms who managed to keep their strongest people during the recession may be at risk of losing them.

What can employers do to hold on to good employees?

1. Make up for pay cuts: it’s a sure way of making affected employees happier. And if you plan on giving raises, say so! Now is not the time for surprises—people need reassurance more than ever. So don’t keep plans to yourself, or use a pay raise to bargain with an employee after they announce they’re quitting.

2. If you promise a pay raise, follow through: nothing is worse than making a promise and not delivering on it.

3. Be flexible: We’ve shared lots of ideas in this blog about boosting morale and supporting employees’ needs. Sometimes it can make up for lower pay—but not always.

4. Pay a performance bonus: If you can, write a bonus plan that rewards your staff for meeting objectives. Pay-for-performance is a good way to give a sense of ownership and commitment.

5. Be open and accountable: if management is getting raises and bonuses, and staff is not, be prepared to explain why.

After layoffs, benefits cuts and asking staff to do without, employers look for ways to boost employees’ spirits. Some buy lunch, while others encourage fun with Halloween costumes. But some inventive employers seek ideas beyond the norm to improve morale and keep employees productive.

Start an employee garden: One Indiana business owner invested $600 in a 1,500 square foot garden on her business property. Four employees shared the workload and the bounty, estimated at $2,400 worth of vegetables and herbs. Free produce is a sure bet for a crowd-pleasing morale booster, helping employees stay healthier by increasing the fresh vegetables in their diets and saving them money, too.

Take an afternoon off to play: Close the doors, turn on the voice mail, and take your crew to the movies, a comedy show, the ball park, or a pottery class. While it’s true that not all businesses can close the doors during regular hours, with proper planning, many can. Give customers plenty of notice, and do what’s necessary to meet their needs. Most customers can tolerate doing without your services for one afternoon a year—and knowing your business invests in your employees creates goodwill.

Throw a party: Thinking of cutting this year’s holiday bash? Think again—it could kill employee morale. (Unless the annual holiday party is lame, in which case it could boost it.) If funds are tight, ask your employees for ideas. They might come up with a celebration that costs less and is more fun than the one you’ve been doing for years. Try a gathering at your home instead of an expensive banquet room or restaurant. Do put out some nice finger foods or a big pot of chili with all the fixings. Do have a silly gift exchange, play some music, and relax. Don’t ask you staff to bring a dish, pitch in for a gift for the boss, or provide their own drinks. They’re likely already strapped for time and money.

Buy the coffee, tea, or hot chocolate this week: Many employers have cut the “free coffee” perk. Bring it back for a week—or one week a month. Anything helps!

Let the dogs in: Allowing employees to bring their dogs to work is a huge morale booster, when it works. First, all must be in favor of having canine companions around. Allergic staff members must be accommodated. Dogs must be well behaved—both on their own and in a group. If your business cannot handle every Molly, Spot, and Chance at once, set up a rotation schedule. Your employees will love having their furry family members close by, and studies show that dogs in the workplace lower stress.

Starting as children, human beings take a great deal of pride in doing a job well. And the tougher the job, the sweeter the feeling. To top it all off, hearing praise from someone we respect makes it all even better.

The same is true in the workplace. Giving employees the opportunity to do for themselves, build a program or manage a project on their own results in higher job satisfaction.

Instead of a constant “trickle-down” type of management, progressive employers are putting the reins in the hands of their employees, encouraging them to form teams and take on the planning and implementation phases of programs designed to meet their tough challenges.

Research supports the idea. The so-called “IKEA effect” shows that people report higher satisfaction with the bookshelves, tables, and cabinets from IKEA that they assemble themselves—whether or not they actually did a good job. The pride of making something makes people feel good, so they assign a higher-than-accurate value to the item.

Similarly, employees place a higher value on a project they are in charge of, or their ideas that are implemented—whether or not it is deserved. People tend to prefer their “babies” over those of others—including management. And managers, too, can fall in love with their own ideas, because they are personally vested in them. The problem is that co-workers and customers may not agree on value.

But managers and business owners, be warned: the IKEA effect can self-destruct, just as quickly as that bookcase you put together without all the necessary screws. If a staff-implemented strategy does not meet its objectives, everyone suffers. Management is less likely to allow a repeat; staff members feel badly; and the company must revamp with another strategy.

Managers and business owners must take risks; allowing staff to gain satisfaction by implementing their own ideas and building their own programs is one that can pay off in the long run.

The number of Americans who are unemployed seems to be stabilizing somewhat, but even those employees who have made it through your company’s toughest times may still be wary, worried, and waiting for their job to be taken away.  With stress at home, unemployed partners, and shrinking household incomes, combined with increased workloads and more on-the-job stress, your staff could be more nervous than ever. Fear leads to unusual or out-of-character behavior. Employers should be aware of changes in their employees—and be willing to try new ways of dealing with old issues.

The continued downturn in the economy can seem like uncharted territory—so just as you drive more cautiously when you don’t know where you’re going, employers should proceed with caution when dealing with employee issues like layoffs and evaluations.

For example, your employees might be more sensitive to criticism. When stresses combine with a feeling that their job could be in jeopardy, even the most even-tempered employee could react uncharacteristically. Employers should take extra time to explain any issues related to performance, suggest ways to improve, and if the problem is not job-threatening, be sure to say so! Never assume your employee knows anything that you don’t directly communicate to them.

During times of stress, employees could become more aggressive about negative evaluations. This isn’t to say that evaluations should be soft-pedaled or toned down to avoid upsetting your team members. Just be sure that negative scores or observations can be backed up with solid evidence, such as incident reports, notes, or other appropriate documentation. Still, employers should prepare for formal challenges from staff members who fear that a poor performance evaluation could lead to losing their job.

Employers should also be cautious about layoffs. A downturn in business can be the sole reason for letting employees go—but that does not preclude an older laid off employee from filing a discrimination case, or an employee whose religious practices differ from yours from hiring an employment lawyer.

So be fair, be sensitive to employee stress, and always keep the lines of communication open with all of your employees. If they are aware of your company’s challenges, feel that they are being treated fairly, and know exactly where they stand, your staff will be more accepting of criticism, poor evaluations, and even lay offs.

As an employer, you take on a lot of “extras” when you hire an employee—some good, some bad. Good is when the employee’s family and friends become evangelists for your product or service. Bad is when the employee’s personal life affects his or her job performance.

So what is an employer to do when an employee has a personal problem? First, stay alert to changes in your staff’s behaviors. Everyone is entitled to a bad day—and being grumpy is not reason enough to be called into the boss’s office.  But if a good employee with a great attitude and performance history has an apparent personality change or if their attitude is affecting fellow staffers negatively, it’s time to take action.

Address the problem directly with the employee. Keep your emphasis on their performance only—not their personality, their perceived happiness (or lack thereof), or their attitude.

Your employee will likely open up—especially if you’ve established a caring communication culture in your company.  How you proceed is dependent on whether the issue is related to work itself, such as stress or a conflict with a fellow staffer; or if it’s completely based in the employee’s personal life.

You may find that what looked like a personal problem is entirely work-related. In this case, you as the leader must take control of the situation—before it gets worse. Ignore it and you could lose a valuable employee, as well as damage your company’s reputation. Whatever method you use to diffuse employee conflict must be employed right away when a good employee’s job performance is negatively affected by another.

Your employee may share that they are having a personal problem. Perhaps it’s trouble with a child’s day care situation. Or, they’re having family difficulties, such as illness or partner problems. While most employers prefer to stay out of their staffers’ personal lives, anything that is affecting their ability to do their job is your concern.  And remember, if productivity is reduced, or interaction with other employees goes south, you have a responsibility to the company and the entire staff to intervene.

But how? Sometimes a caring ear is all that’s required. Your employee’s attitude could change 180 degrees just because they realize their employer cares. Suggestions regarding day care, home health care for an ill family member, or even drug and alcohol counseling referrals could all be welcome advice to your employee. Tread lightly and respect their right to privacy, but let the employee know that poor performance and affecting others cannot be tolerated long-term.

In our current economy, employers see bad news and leading indicators that affect them every day. One week employment is up; the next week construction spending is down. First, economists predict the recession will be over by the fourth quarter of 2009, and then the US Treasury Secretary says it’s going to take more time to see real recovery. Roller coasters will give employers a smoother ride than the news will!

If you need a chuckle to get you through the week, take a look at what hiring managers are hearing from their employees—including these very odd complaints, reported by CareerBuilder in a recent survey.

Some complaints were about fellow employees:

• Is too sun-tanned.
• Has big hair.
• Eats all the good cookies.
• Is so polite, it’s infuriating.
• Is trying to poison me.
• Their body is magnetic and keeps de-activating my magnetic access card.
• Aura is wrong.
• Breathes too loudly.
• Has ticks.
• Wears pajamas/socks/slippers to work.
• Wears bells on her shoes.
• Reminds me of Bambi.

Others were about the company:

• Doesn’t provide a place for naps during break time.
• 8:00 a.m. is too early to begin work.

Sometimes, we just have to laugh at what makes people upset in the workplace!

What does it mean to hire your first employee? Hiring employees is a major growth point that really takes a small business to another level. While it’s not easy knowing you’re completely responsible for your own livelihood, it’s quite another to take on another person’s. Talk about pressure to perform! No employer wants to hire an employee, only to have to let them go when business falters.

So, how do you know when it’s the right time to hire? Many business managers believe that a business should stay lean—especially in this economy. Plenty of successful companies run with fewer people than they really need. You might approach hiring by asking yourself the question, “is it going to be nice to have this person, or do I absolutely need this person?”  Having a bare-bones staff actually adds to the development of employees’ talents and abilities. Asking for more creativity and problem solving from employees allows them to grow and discover where they can excel.

Letting Go
We’ve all heard a business owner say, “I’d rather do it myself than tell someone else how to do it.” Hiring employees means a business owner must get used to letting go of a number of responsibilities—some of which they’ve been performing since day one. As a single-employee business, an owner is often salesperson, marketing department, financial officer and janitor—and can easily fall into the mind set that nobody cares as much, so no one will perform these tasks with the same level of care as they will.

But nobody can do everything a business needs to run successfully forever. In the short term, perhaps—but if your business is not growing, it’s dying. As an owner, you should be thinking forward, planning growth and strategy, and making the big decisions. This includes knowing when it’s time to hire staff to handle the everyday tasks. Not letting go can lead to a less successful business in the long term.

Balance Staffing with Customer Service
There is a balance between running a lean company and falling short on customer service. Obviously, customers must come first to keep sales healthy, and if your staffing level does not serve the customer, something needs to change. Foster a company culture where employees feel free to communicate their own and the customers’ concerns regarding service levels. Ask your staff for feedback and let them know that you are committed to customer service first.

Legislation is a constantly changing reality for all of us who drive cars, buy and sell property, own a dog, talk on our cell phones, walk down the street, or just inhabit a city, town, county, or any other municipality in the U.S. Laws are something we don’t think about constantly—unless we’re planning to break some.

For employers, legislation is something you must keep up with, or you can really get in trouble. Today we’ll review two laws covering employees that you should already know about, along some new laws that are pending or have passed recently.

First, the newbies:
Lilly Ledbetter: The Lilly Ledbetter Fair Pay Act of 2009 is a result of the namesake’s pay discrimination lawsuit against Goodyear Tire & Rubber Co., which went to the U.S. Supreme Court. The Court heard arguments about a requirement, established by the 1964 Civil Rights Act, that equal-pay discrimination be addressed within a 180-day statute of limitations. The Court ruled it commenced from the day the pay was agreed upon, not the latest paycheck, overturning a lower court’s decision.

The new law amends the CRA to reset the 180-day statute of limitations to begin with every discriminatory paycheck.

Employee Freedom of Choice Act: This is pending legislation in the U.S. Congress, which would amend the National Labor Relations Act to make it easier for employees to form, join, or assist labor organizations. EFCA removes the secret ballot requirement that currently exists if employees want to form a union, guarantees workers a contract if they form a union, and strengthens penalties against companies who break laws during union organizing campaigns and first contract negotiations.

And the oldie, but goodies:
FMLA: The Family and Medical Leave Act gives qualified employees of certain employers up to 12 weeks of unpaid leave per year. During the 12 weeks, the employee’s job and benefits must be protected. FMLA applies to public agencies, public and private schools, and companies of 50 or more employees. Employees must have worked for the employer for at least 12 months, and for at least 1,250 hours over the past 12 months.

Under FMLA, qualifying reasons for leave include: the birth and care of a newborn child, the placement of a child for adoption or foster care, caring for an immediate family member with a serious health condition, or the employee’s own serious health condition. Another qualifying reason is in the case of an employee’s spouse, son, daughter, or parent’s active duty or call to active duty status as a member of the National Guard or Reserves. Plus, eligible employees may request up to 26 weeks of unpaid leave to care for an immediate family Armed Forces service member with a serious injury or illness.

ADA: The Americans With Disabilities Act of 1990 prohibits employers from discriminating against qualified individuals with disabilities in hiring, firing, advancement, compensation, and job training. The ADA covers employers with 15 or more employees. The ADA also requires employers to make reasonable accommodations to the employee’s disability if it does not impose a hardship on the employer’s business.

In hiring, the ADA prohibits employers from asking job applicants about the existence, nature, or severity of a disability. Applicants may be asked about their ability to perform specific job functions. Medical examinations may be required of an applicant with a disability, but only if the exam is required for all new employees in similar jobs.

That’s the legislative update for now; more to come!