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Do You Have an Employment Contract, Really…

In a series of recent discussions, I was reminded of the need for one of the most basic of all employment matters. The employment contract.

NO, I am not talking about an actual written, legal document, although those are handy in many situations. Rather I am talking about having a very detailed discussion with every employee that joins your team. This is a critical step in setting you as a leader and the employee up for success.

Too much is implied when we post a job. We outline some skills, we establish a pay rate, and we talk about benefits (or lack thereof), and a few other things. Yet once someone accepts the job, a specific discussion about roles, duties, and responsibilities is seldom shared.

More importantly, the culture is not fully explained. Somehow we expect new hires to gain by osmosis the key values, standards, and principles we want our company to deliver.

That’s just way too important to leave to chance.

Exploring the Basics

Let’s level-set here about a contract. Most contracts are between two parties. Each promises to do something or follow something in return for the other’s promises. In the case of employee/employer, the employer promises to compensate (pay) the employee for time spent doing the work. On occasion, the contract is for a specific work product delivered.

The employee agrees to perform the duties as outlined by the employer. It is in the details that we get lost or ignored.

If the terms of the contract are breached or failed, one party has a provision to take action against the other. And yes, in our legal system, contesting contracts can get very messy and costly.

However, I’d argue that in the work world, it is just as costly to have a new hire set up to fail. This is why having the contract discussion is so important.

What should I include in a new Employee Contract discussion?

  • Terms of employment.
  • Benefits.
  • Responsibilities.
  • Non-compete clause.
  • Compensation information.

Employment contracts are a standard for businesses in almost every industry. As an employer, the employment contract helps you to communicate your expectations very clear to new employees.

For employees, contracts help to clarify the details of their employment and have a point of reference for the terms of that employment. They can also turn to the contract for support if they ever feel that their job has gone beyond what was originally agreed upon.

What’s Missing

While basic matters like schedule, pay, benefits, vacation, and logistics get covered during most onboarding, what I see missing is the time to talk about exact expectations for the work that is about to be performed.

Too much gets left to folklore, customs, traditions, and word of mouth.

I believe a key role of leadership is to provide clarity for each team member. Clarity of purpose, understanding of the vision for the team, and an opportunity for the employee to feedback on what they heard so true understanding is achieved.

Without this exchange, a new member of your team is not fully equipped to perform at their highest potential.

I’ve said that no employee really wants to be average. [Footnote here… yes I know we all have blown our hiring process and brought on someone who is a bad employee, that happens.] If you follow your process and stay on track with a solid hiring model, the people you bring in want to do good work.

YOU have to show them what that is.

The Small Business

If you’re an entrepreneur, you have a vision; a dream for your company. You have an idea of who and what you want to represent in your niche market.

But surprise, not every person you hire will show up with that same vision. You have to teach it to them, enforce it daily, and reinforce it over time.

This sounds like work, and it is. But if you want your dream to become reality, this is the only way to get there.

I see businesses spending a lot of time hammering out a brand statement; defining their idea of the brand. Ultimately, a brand is what your customers decide it is. They ask themselves questions like “Can I rely on this product or service?” “Do I see value here?” “Does this company deliver what they say they will?” And so on…

If you say you want to be known as a family value brand, but your team looks and acts like a bunch of motorcycle gangs (the bad kind), you’ll never deliver the brand you want. [Yes, I used an extreme example, but you get the point.]

What to Do?

Take a look at your practice for bringing in new talent. Ask yourself whether they are getting the right information on the full picture of what you want to do.

When you have your next new hire, do it differently. If you have some recent hires who are still settling in, start now. Pull them in and have the talk.

You’ll be glad you did.

Introducing the WHY.os. Learn YOUR why, how, and what that drives your passion and motivation.


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