Small Business Owner's Guide to Managing a Remote Employee
Remote work has become a standard arrangement even for small businesses, and it requires a different management approach than in-person work. The instincts that work when everyone is in the same building do not always translate. Here is what you need to know.
Expectations Have to Be More Explicit
In an office, a lot of expectations are communicated informally through observation, through proximity, and through the ambient culture of the workplace. A remote employee does not have access to any of that. They cannot observe when people arrive and leave, how responsive colleagues are to messages, what 'done' looks like on a project by watching a teammate work through it.
This means that as a manager, every expectation that matters needs to be stated explicitly in writing. Core hours. Expected response times for different types of communication. How to indicate when they are unavailable. How output will be measured. What deadlines look like and what happens when one is at risk.
Write these down before the remote arrangement begins, not after the first miscommunication.
Output Over Activity
The most common mistake managers make with remote employees is trying to manage activity like logins, keystrokes, and screenshot monitoring, rather than output. This approach signals distrust, destroys morale, and almost always backfires by increasing turnover among exactly the employees who have the most options.
The better approach: define what 'done' looks like for every significant work product, set clear deadlines, and evaluate employees on whether they deliver. An employee who completes everything expected of them at high quality on time is doing their job, regardless of when they logged in or how many hours they were visibly active.
Communication Rhythm
Remote employees need more structured communication than in-person employees. Not because they require more supervision, but because the informal touchpoints that happen naturally in a shared space have to be intentionally replaced.
At minimum: a weekly one-on-one with their direct manager, a team check-in if applicable, and clear direction about which channels to use for what type of communication. 'Urgent question? Call or text. Routine update? Slack or email. Sensitive topic? Schedule a video call.'
Write these norms down and communicate them. Assume nothing is obvious.
Your Policies Need to Address Remote Work
Your employee handbook and HR policies need to be updated to address remote work arrangements specifically. At minimum your policies should cover:
Eligibility: which roles are eligible for remote work and under what conditions
Equipment: who provides it, who maintains it, what happens if it is damaged
Home office: any requirements about workspace standards or security
Expense reimbursement: what the company covers for remote work expenses
Core hours and availability expectations
Data security requirements for home networks, VPN use, and handling of company information
In-person requirements: any expectations about coming into the office for meetings or team events
A remote work policy that is silent on these areas creates ambiguity that becomes conflict when something goes wrong.
Performance Management Does Not Change
The same performance standards that apply in the office apply remotely. If a remote employee is underperforming, the response is the same: a direct conversation, documented expectations, a defined timeline for improvement, and progressive discipline if needed.
The most common failure in remote performance management is allowing issues to persist longer than they would in person because the distance makes the conversation feel less urgent. It is not less urgent. Address it using the same process you would use for any employee.
State Law Follows the Employee
One often-overlooked complexity of remote work: if your remote employee works from a different state than your business is registered in, that state's employment laws may apply to that employee. California, New York, Colorado, and several other states have employment laws that are significantly more protective than federal law, and those laws follow employees who work in those states regardless of where their employer is located.
Before agreeing to a remote arrangement where an employee will work from a different state, check whether that state has specific requirements around PTO payout, final pay, harassment training, or other areas that differ from your home state. You don’t want to have a major surprise later. Do the work now, and create or revise your employee handbook to reflect these changes. If you haven’t done that yet, our handbook template includes a remote work policy section covering eligibility, equipment, availability, expense reimbursement, and data security, ready to customize for your specific arrangement.
→ Small Business Employee Handbook Template — $199 | pragmatichrgroup.com
Editable Word document + PDF. Instant download. Created by a SHRM-SCP certified HR professional.
Questions about this or other HR topics? Visit pragmatichrgroup.com for more resources.
