What Is People Management?

The heart of any organization is its people. Great leaders understand the critical importance of investing in people rather than focusing solely on processes or outcomes. From hiring and recruiting to coaching and mentoring, managing people effectively motivates employees to do their best work while creating a culture where they feel valued and supported.

People Management Definition

People management is the process of training, directing, and supporting employees as they contribute to organizational goals. Good people managers strike a balance between focusing on tasks, processes, and results and attending to their team members' human needs.

Effective management requires a mix of technical skills, soft skills, and coaching skills to help team members perform well in their roles and develop professionally.

Why Is People Management Important for Businesses?

People managers translate an organization's vision and goals into tasks and processes. Just as importantly, they lead teams by establishing a plan, overseeing projects, motivating and supporting team members, and creating a positive work environment.

Here's why effective people management matters for businesses:

• Productivity and Performance: Effective people management directly influences how efficiently employees work. Good managers can increase productivity, while poor management can reduce output.
• Retention and Turnover: Employees often leave organizations because of poor management rather than dissatisfaction with their work. According to SHRM, uncaring and uninspiring leaders are among the top five reasons people leave their jobs.
• Innovation and Adaptability: Good people managers create environments where employees feel safe sharing ideas and taking calculated risks, which drives innovation essential for business growth and adaptation to changing markets.
• Company Culture: Managers shape workplace culture, affecting both internal morale and external reputation. Companies with strong people management practices are more likely to be recognized as desirable employers, which in turn helps to attract top talent.
• Business Strategy: Managers represent a critical link between organizational vision and day-to-day execution. Their ability to translate strategy into actionable steps for their teams is the key to achieving business goals.

Key Responsibilities in People Management

Your people are your most valuable asset. When you create positive employee experiences, team members will likely enjoy their work more, stay with your company longer, and serve customers more effectively. Alisha Moberly, a Talent Enablement Partner at Paychex, suggests that to be an effective people manager, one must “think of creating these positive employee experiences as a strategy to drive business results, not just an employee perk.”

Effective people management starts before an employee’s first day and remains essential all the way through their retirement. Here's what it involves:

• Recruiting and Hiring: Before a candidate ever joins your team, hiring managers impact their perception of your company, communicate your workplace culture and set expectations. A strong candidate process should include timely and respectful communication, transparency about the job, a competitive compensation package, and clear values.
• Onboarding: Once you hire a new employee, the onboarding process should be structured to help them ramp up quickly, connect with other team members, integrate into the company culture, and understand how their role interacts with company objectives and other departments.
• Training and Development: Investing in your team members' professional development is a critical people management strategy. Training and development programs should provide a clear path to advancement, offer opportunities to upskill or reskill, and allow team members to advance their expertise through courses or certifications.
• Performance Management: Performance management involves more than an annual or quarterly review. Managers can help employees achieve their best by communicating and providing regular feedback. “Performance reviews should be thought of as more than just a formality or ‘check-the-box’ item,” clarifies Moberly. “When defined individual and team goals align with overall business objectives, they can be a catalyst for the growth and success of your company.” They can also support professional growth by coaching teams through goal setting, tracking progress, encouraging 360-degree input from team members, and conducting formal reviews.
• Engagement: Employee engagement helps measure the effectiveness of your people management strategy. SHRM reports that in 2023, just one-third of employees were engaged at work. To boost engagement, people management strategies should focus on cultivating a culture that prioritizes employee perspectives, well-being, and workplace experiences.
• Recognition: Recognition demonstrates that employee efforts are seen and valued. From formal recognition programs to in-the-moment conversations, recognition can boost productivity and overall job satisfaction as employees develop positive relationships with managers and coworkers.

Best Practices for Effective People Management

People management is a learned skill that can (and should) improve over time. Here are some keys to creating a supportive, engaging work environment.

1. Build Your Team Strategically

Managing people effectively starts with hiring the right employees. When considering hiring needs, evaluate candidates holistically to gauge how they will approach the role and interact with others.

• Examine Technical Skills: Does the candidate have the technical expertise you need and the ability to learn new skills quickly? This question is crucial for technology roles where skills may become outdated as new technology emerges.
• Assess Cultural Fit: Does the candidate share your organization's values? What are their perspectives and career goals?
• Involve Team Members: How does the candidate interact with potential team members during a team interview? Does the team feel good about bringing them on board?
• Consider Growth Potential: Would this candidate be a good option for future leadership roles? What training and development would they need to take the next step in their career?

2. Set New Team Members Up for Success

Onboarding can make or break a new employee's experience at your company. According to the Paychex 2024 Pulse of HR Survey, nearly half of new hires say their onboarding experience is inadequate, and 30% of those are planning to find a new job.

Intentional, structured onboarding can turn those numbers around by providing:

• Streamlined processes to get new hires up and running
• Intuitive access to critical information
• Structured training and in-the-moment resources
• A peer mentor who can answer questions and help the new hire connect with other team members

3. Communicate Expectations Clearly

Establish specific, measurable expectations and document them in a role description. Include role responsibilities, success metrics, and goals, and explain how the role aligns with team efforts and organizational objectives.

Revisit expectations regularly as projects evolve, and schedule one-on-one check-in meetings to adjust priorities. During these meetings, team members can ask questions and provide feedback, and managers can address any course corrections or changing business priorities.

4. Provide Regular Feedback

Don't wait for an annual review to give performance feedback. Yearly reviews help document an employee's growth and productivity, but regular formal and informal feedback gives them the opportunity to make adjustments along the way. Moberly states that “regular, ongoing feedback is the foundation of effective people management. It builds trust, guides growth and development, promotes engagement, and ensures alignment with the business strategy.”

As part of your people management strategy, focus feedback on specific behaviors and balance constructive criticism with recognition of strengths. Making feedback a two-way conversation where employees can share their perspectives helps reduce the stress of the review process and supports better performance overall.

5. Foster Employee Development

Every employee should have the opportunity to grow professionally. According to Work Institute's 2024 Retention Report, career development has remained among the top five reasons employees leave their jobs over the past five years. Consider providing learning and development opportunities such as:

• Personalized development plans that address both technical skills and leadership capabilities
• Learning opportunities tailored to individual career aspirations
• Stretch assignments and cross-functional projects to develop new skills
• Mentor programs to prepare employees for leadership roles

5. Promote Open Communication

Transparent communication about decisions, expectations, and changes builds confidence and keeps teams on the same page. Work to create a psychologically safe environment where team members feel comfortable sharing ideas, concerns, and mistakes without fear of negative consequences.

Intentional listening also demonstrates that employee input is valued, especially when leadership responds to employee feedback and implements ideas where possible.

6. Recognize Team Member Contributions

Help team members feel valued by recognizing contributions and celebrating accomplishments. Recognition strategies can include both formal and informal expressions of thanks, such as:

• Awards for meeting goals
• Public shout-outs for teams or individuals who go above and beyond
• Personalized thank you notes for a job well done
• Financial rewards
• Team lunches

Recognition should be specific, timely, and directly connected to your company values and objectives. “If you are unsure how your employees prefer recognition, simply ask them!” suggests Moberly.

8 Essential Skills for Successful People Management

Technical expertise is important, but leaders also need a unique set of people management skills to motivate teams, create supportive work environments, and address challenges when they arise. Here are eight essential skills for building strong, effective teams.

1. Communication

To do any job well, people need to know what they are supposed to do, how they should do it, why it matters, and what success looks like. Poor communication leaves teams struggling to make progress because they don't understand the expectations.

Effective managers clearly articulate expectations, provide feedback, and listen actively. They also adapt their communication style to different team members and situations so that everyone hears and understands the message as intended.

2. Emotional Intelligence

Emotional intelligence builds on clear communication by recognizing and managing your own emotions while acknowledging the feelings of others. Managers with high emotional intelligence develop better relationships, navigate conflicts more effectively, and help create a psychologically safe environment for all team members.

Empathy is a key aspect of emotional intelligence. It enables managers to see other perspectives and respond with care and compassion.

3. Problem Solving

Problem solvers know how to identify challenges quickly, analyze root problems rather than just symptoms, and think creatively to overcome obstacles. Effective people managers work with their teams to solve problems and create sustainable solutions that work for everyone.

They also look at the larger context of the problem to identify contributing factors and find sustainable solutions rather than temporary fixes.

4. Conflict Resolution

Conflict resolution is often one of the most challenging people management skills to master. However, when handled with emotional intelligence and consistency, conflicts can be opportunities for learning and growth.

Skilled managers have the courage and skills to address conflicts promptly so they don't fester and create problems within the team. They also look at factors outside the immediate situation to determine whether burnout, stress, or external circumstances could play a role.

5. Coaching and Mentoring

Great managers know how to develop their teams by providing personalized guidance, constructive feedback, and opportunities for growth. Coaching-style management helps improve individual and team performance while creating a supportive environment where employees feel valued.

As managers consider promotions and growth opportunities within the team, a mentoring approach can help them develop skills in promising employees and provide support as they take the next step in their careers.

6. Strategic Thinking

Understanding how daily work connects to organizational goals helps managers prioritize effectively. Strategic thinking also supports better decision-making and helps team members understand how their work contributes to the bigger picture as they set goals and complete projects.

7. Adaptability

Change is one of the most reliable constants in today's workforce. A manager who cannot adapt to new processes, systems, and technology will not be able to lead teams through change effectively.

Adaptability starts with developing self-awareness. Understanding your typical responses to change and recognizing resistance allows you to choose different reactions and model flexibility for your team.

8. Cultural Awareness

Understanding cultural differences is foundational to creating a diverse, inclusive workforce. Cultural awareness helps people managers seek out and respect diverse perspectives as they create environments where all team members can thrive.

Awareness training, coaching, and continual learning promote a sense of belonging for every member of the team.

People Management Challenges and How To Overcome Them

Even the best managers sometimes struggle with communication, employee motivation, conflict resolution, and other workplace challenges. Let's look at some of the most common issues that arise.

• Ineffective Communication: Unclear or poorly delivered messages may cause misunderstandings, errors, or productivity impacts. This pitfall may happen when information is shared inconsistently, fails to reach the intended audience, or is not communicated effectively.
  • The Solution: Communicate frequently, transparently, and consistently. Implement regular check-ins and use multiple communication channels while encouraging team members to confirm their understanding.
• Lack of Feedback: Without regular, constructive feedback, employees operate in a vacuum. They may be unsure whether they're meeting expectations or unclear on how to improve their performance. This absence of guidance leaves team members feeling undervalued and disconnected from organizational goals and may escalate into more serious problems if issues aren't addressed.
  • The Solution: Establish a consistent feedback rhythm with weekly check-ins, monthly progress reviews, and informal touchpoints between scheduled meetings.
• Managing Difficult Employees: Addressing problematic behaviors or performance issues requires a balanced approach of empathy and accountability. If not handled well, these issues may negatively impact team dynamics and productivity.
  • The Solution: Address issues promptly with clear documentation, consistent follow-through, and regular follow-up. Approach difficult conversations with empathy, respecting the individual's dignity and exploring the underlying causes of challenging behavior.
• Teamwork Breakdowns: Teamwork challenges may lead to communication misfires, collaboration failures, or unsupportive teams that prioritize individual interests over collective goals. These breakdowns may stem from unclear roles, lack of psychological safety, unresolved conflicts, or inadequate leadership, and may ultimately undermine organizational performance and employee satisfaction.
  • The Solution: Clearly define roles and responsibilities while creating opportunities for collaborative problem-solving and diverse perspectives. Regularly communicate team expectations, give team members the opportunity to provide feedback, and create a protocol for addressing challenges promptly.
• Resistance to Change: Change resistance is often linked to fear of the unknown, comfort with the status quo, or a combination of both. It escalates when employees don't understand the reason for the change or how it will impact their daily work.
  • The Solution: Communicate about change early and often. Help team members understand all the steps that will take place before they happen and give them opportunities to provide feedback and ask questions. To manage change effectively, communicate the reason for the change, discuss benefits, acknowledge concerns, provide ample training, and offer support throughout the transition period.
• Compliance with Employment Law: Compliance with evolving local, state, and federal employment law is a complex endeavor. To protect employees and the organization, managers must understand and adhere to regulations governing hiring, compensation, workplace safety, discrimination, harassment, and termination.
  • The Solution: Provide ongoing education about legal requirements, maintain consistent documentation of decisions and incidents, and partner with HR to develop policies that meet or exceed legal standards.

“It is critical to show empathy when supporting employees through change. Employees need to feel heard and supported so that they can be more open to embracing change.”
Alisha Moberly | Talent Enablement Partner at Paychex

The Role of Technology in People Management

Many of the skills required for effective people management, such as empathy, emotional intelligence, and mentoring, can't be replicated by a machine. However, technology can support managers by collecting and analyzing data and automating routine tasks, allowing managers to focus on higher-value activities.

Using technology, managers can make better decisions based on concrete data rather than intuition. For example, they can analyze data throughout the employee lifecycle to make strategic talent decisions. Technology can also automate tasks like payroll processing, benefits administration, and PTO tracking.

Integrating artificial intelligence and machine learning into people management processes represents another significant advancement. With AI and predictive analytics, for example, managers can identify resignation risks before employees leave, recommend personalized development opportunities, and optimize workforce planning. AI-assisted recruiting tools can streamline the recruitment process with automated resume screening, candidate matching, interview scheduling, and more.