Question

briefly explain how flexibility, informality, and familiarity benefit small firms. How might the opposite be true? Give a real or hypothetical example of each

Answer 1

Ans) Small businesses need to capitalize on their strengths, so in dealing withemployees,they should capitalize on their smallness.

A. Flexibility in Benefits and Rewards – The Family and Work Institute surveyedthe benefits practices of about 1,000 small and large companies.They foundthat large firms offer more extensive benefit packages than do small ones.However, many small firms seemed to overcome their bigger competitors byoffering more flexibility.

1.A Culture of Flexibility – Because of the familiarity that comes from ownerspersonally interacting with the employees each day, small business did abetter job of fostering a culture of flexibility.

2.Work-Life Benefits – Even without the extensive resources that larger firmsenjoy, small firms can offer employees work-life benefits that largeremployers cannot match.For example, additional time off, compressedworkweeks, flexibility, and other benefits that can be offered because oftheir relatively small size.

3. Recognition – Studies demonstrate that recognition can often be aspowerful as financial reward.The relatively personal nature of smallbusiness interactions makes it both easier and more important torecognize employees.

4.Simple Retirement Benefits – There are several ways that small firms canprovide retirement plans for their employees.The Pension Protection Actof 2006 contains a provision for a new type of retirement benefit thatcombines traditional defined benefit and 401(k) plans.B.