But the wider scope of personnel management is to build a team to deliver the products or services required by the business now and in the future and so that natural leaders can be developed to perhaps one day take over when the owner is ready to retire.

For small businesses, this more strategic role is often undertaken by the business owner, but sometimes this can be a false economy as it’s often difficult to see reality about our culture when we are in the thick of things. It’s also difficult to take a step back and be concerned about the importance of whether someone shares our values when we are desperately short of waitresses or chefs and just need to get someone through the door. But, given the high cost to recruit a new member of the team it’s important not to underestimate the need for this strategic oversight. 

In a small café or restaurant for example, it’s especially important that the owner’s values are represented through the culture of the business otherwise the business loses its unique selling point. 

Bitesize masterclass

Quick overview

What do we mean when we talk about 'personnel management'? Why is it important and what do you need to have in place to make sure it is effective?

Key areas that fall within the remit of personnel management

There are a few key areas that you’ll need to make sure you have sorted out for your business, and which fall under the general subject area of personnel management.


Recruitment is such an important element to any business that we’ve created a selection of masterclasses, fact sheets and checklists on this website specifically focussed on recruitment. 


The culture of a business is the set of behaviours and norms that are displayed on a daily (almost subconscious) basis.  Culture can change over time, often with the introduction of new people, and in larger companies there can be different cultures in different departments.

Culture can be positive or negative – but it has a major impact on the success of any business, especially because it directly relates to a business’s employees and can make it a positive or negative place to work. A positive workplace means high staff retention and very happy customers. A negative workplace is often reflected in a high staff turnover or high sickness and nervous customers.

Culture generally becomes toxic when a leader, or leaders, say one thing (often because they truly believe and want a value to be true) but act very differently. Or when they haven’t articulated or recruited based on values and have a team of people whose values are completely disparate. Or when there are different leaders with different values. 

The problem is, it’s very difficult to see our own patterns and the effects of these on others.


There are several acts and laws in place that you will need to be familiar with and comply with to ensure that you are not brought to a tribunal by an employee. Remember also, that it’s good for your business to protect your employees, and by adhering to the principles behind these laws you are well on your way to doing so.

Some examples of what is covered by employment law include: –

  • Bullying and harassment
  • Data Protection
  • Discrimination 
  • Dismissal and grievances
  • Employee contracts
  • Health and Safety at work
  • Holiday entitlement and parental leave
  • National Insurance and Income Tax payments (IR35)
  • Pay including minimum wage, equal pay and maternity pay
  • Pensions
  • Redundancy
  • Right to belong to Trade Unions
  • Working hours


These are all covered under the main employment laws that are listed below.

  • Agency Workers Regulations (2010)
  • Bribery Act (2010)
  • Employment Relations Act (1999)
  • Employment Rights Act (1996)
  • Equality Act (2010)
  • General Data Protection Regulations (2018)
  • Health and Safety at Work Act (1974)
  • Maternity and Paternity Leave Regulations (1999)
  • National Minimum Wage Act (1998)
  • Part Time Workers Regulations (2000)
  • Social Security Contributions (Intermediaries) Regulations 2000
  • Transfer of Undertakings Protection of Employment Regulations (2006)
  • Working Time Regulations (1998)

An employee’s rights are determined by their employment status which include (in broad terms) whether they are: –

  • An employee (who has an employment contract)

As a minimum an employee has a right to written terms of their employment including their salary, job role, responsibilities, policies and procedures, and rights to sick pay, holiday pay and parental leave, as well as notification of their right to claim redundancy pay and unfair dismissal after 2 years’ service.


  • A casual worker (usually paid for piece work or small services)

As a minimum a casual worker will have written terms that outline their roles and responsibilities, their right to national minimum wage and holiday pay, as well as protection against unlawful discrimination.


  • Self employed (responsible for their own employment terms)

Self employed people are still protected against discrimination and can expect to be protected under the Health and Safety at work at, but it is expected a third-party supply agreement will exist in relation to their services and agreed remuneration. 

We’ve included a Fact Sheets on different employment contract types, showing the pros and cons for each, including what this means to you as an employer.


A business needs to keep a whole myriad of records to both demonstrate that a business is complying with the law, but also to ensure an employee receives support throughout their employment. This includes ensuring their correct allocation of holiday entitlement; building a picture of any absences which might indicate underlying problems; building a picture of their development needs, training received and their specific achievements which may support an application for promotion or a pay rise. Records are also needed so that in the event of an emergency the business knows who to contact, so that the individual can be paid and so that the business is aware of any medical issues that may mean the individual needs support, or which may prevent them from undertaking certain tasks.

All of these records need to be collected, stored, maintained and deleted in accordance with government guidelines (retention period) and GDPR (conditions) and so it’s no small task.

Policies and processes

Unless your employees have access to clear guidelines within which they should work and what is expected of them, they cannot be expected to perform the duties you’ve employed them for. 

For some organisations this will be written documentation and we’ve included information on the creation of an employee handbook which is a great way to include everything your employee will need to know.

For others, you may prefer to record short videos on topics and save these on-line or on an App so that your employees can refer to them ‘on the go’.

The depth of instructions will also depend very much on your organisation and culture and values. For example, your product or service may require a very prescriptive service delivery – think McDonalds franchises that are expected to produce their burgers and other meals to an exact specification. Or you may decide to leave the process to the individual if the outcome matches your specification.

When developing processes and policies, think about the words and terms you use to ensure that they are not ambiguous. For example, high quality can mean very different things to different people. Try and be as specific as possible.

Performance management

We’re not all born people managers and hence it’s often tempting to fall back on the traditional annual performance review system, which is administratively easier to manage, and which enables us to ‘bury or forget’ otherwise confrontational and difficult issues.

Rather than waiting for a formal review or appraisal though, a concerned colleague or manager asking if everything is OK when they notice that work is suddenly sloppy or there are lots of sick days taking place can make an immediate difference to a performance related issue. Likewise, when someone does something exceptionally well, to recognise and reward this at the time rather than have the employee raise it 6 months down the line when looking for a pay rise, inspires more regular and increased performance not just with the individual but also other team members.

But where continued performance issues exist, it’s really important to deal with the issue rather than allow the issues to continue. Failure to do so says to other staff members that you’re happy to tolerate poor performance or behaviour and it lowers the baseline for everyone. 

There are legal and ethical ways to manage difficult or poor performance or conduct, and this is where having specialist HR supports comes into its own. The last resort for a business should be to part company with an individual. Assuming a rigorous recruitment process was in place when the employee was recruited, often, additional training, support or perhaps even changes in the environment can turn things around. But where someone is truly out of their depth, and where every other avenue has been explored, an experienced HR professional (even if hired on a contractual basis) can ensure that any parting of ways is both lawful and supports all parties.

Whilst your business focus will always be on providing the best product or service you possibly can for your customers, don’t underestimate the impact your team – whether permanent or only contractors have on your ability to do this. As such, we urge you not to underestimate the impact you have on your team. Getting it right will be critical for your business.

Personnel Management Masterclasses

In this first of three masterclasses on personnel management, Liz talks about the employee lifecycle and the different types of policies, processes and plans you will need to have in place to support your employees during the different lifecycles. By the end of this video on personnel management you will be able to consider whether your current measures are sufficient to fully support your employees, your culture, and your future business plans.

Employee Handbook Introduction

Employee Handbook Introduction.docx


Employee pensions

Employee pensions.docx


Holiday Entitlement

Holiday Entitlement.docx