THE SAME TRAITS THAT help a small-business owner build a company from scratch can become a hindrance when it comes to managing employees.

Entrepreneurs who are driven and passionate about their companies often find it difficult to let employees do their jobs. And that's when business owners become the least effective of bosses: micromanagers.

Watching over a staffer's shoulder wastes time, kills morale and can easily drag the business down, management experts say. While it's tough to give up control, showing employees that you trust and respect their abilities can lead to top performance, says Batia Wiesenfeld, a management professor at New York University's Stern School of Business.

When employees feel like they are independently making a contribution to the company's mission or bottom line, "they work harder and work better," Wiesenfeld says. "They make the right choices in how to allocate their time." Most importantly, when it comes to their jobs, "they get a feeling of satisfaction," she says.

So how to back off and let your worker bees do their business? Here are five tips.

1. Hire the best
Once you do that, set them to their tasks. That's the principle Varda Amdur, founder of marketing and communications firm, Varda Amdur Promotions in Tarrytown, N.Y., has followed successfully for 28 years.

The Benefits of Micromanaging?

Not all entrepreneurs fight the urge to micromanage. A number of small-business owners interviewed for this article took umbrage at the notion that micromanaging is a negative. The micromanagers were not only animated, but adamant about the need to oversee their employees' work. (One even wanted to direct the course of this article.)

Phil Hamling is one of those small-business owners who makes no bones about it. Not every employee can be left to his own devices, Hamling says. His company ZIRCAR Ceramics, in Florida, N.Y., has 33 employees and has been around since 1974.
"You look for people who bring significant skills to the table and can apply them without direct supervision, who can think like you or better than you," he says. "But you always encounter people that you have to micromanage. Otherwise you'd be just handing them the money."

Other business owners disagree, of course. Amdur, owner of the Tarrytown marketing firm, subscribes to the theory that time is money. Business owners can maximize their time by not doing every job in the office or store or factory — and letting talented employees get their work done. "In the case of my company, all I have to sell is my time," she says. "If I value my own time, micromanaging is sinful."

Her staff is small — two full-timers and one part-timer — so to maximize the return on her payroll dollar she strives to find the most capable, productive talent she can hire. "And, if you feel you can't afford the best full-time [workers], hire them part time," Amdur says. There's a vast pool of professionals making transitions in life — perhaps they're staying at home with new children or considering a career change — who make excellent, conscientious staffers and need little guidance to tackle most tasks, she says.

2. Set goals and hold people accountable
That's the golden rule, according to Michael Rosenberg, co-owner of Impact Marketing Group, a Des Plains, Ill., manufacturer's representative agency and sourcing firm that employs six full-time workers.

Rosenberg says he sits down with his employees on a regular basis to review and establish goals. And they figure out time frames for accomplishing those goals, which ensures that he and his staff are on the same course.

3. Provide the resources for achieving goals
That's a key partner to goal-setting, management experts and business owners agree. Unless you provide the tools, you're setting up your staff for frustration and failure. So figure out what you want employees to accomplish, and then determine what's needed — be it software, professional assistance, time or education — to get the job done.

4. Focus on the outcomes
"You want the job done right, but that doesn't necessarily mean your way." That's the wisdom of Martha Huizenga, co-owner of D.C. Access, a four-year-old Internet service provider in Washington, D.C.

Her approach is right on, says Wiesenfeld, the NYU management professor. In fact, she says, keeping in mind that there's more than one way to get the job done is the most important step micromanagers can take to begin changing their habits. "Focus on: Are people getting the outcomes you want, are they making the sales you want, are they as accurate as you want them to be?" Wiesenfeld says.

Huizenga came upon this realization in part because she doesn't want to be the type of hovering boss she always despised. "I hate micromanagers," she says. At the same time, "I think I might have a tendency to be a controlling person. I am very detail-oriented and I may be a little picky." Now, she lets employees take their own approach and acknowledges "if there is a better way, then that's fine."

5. Be available
Just because you've permitted your employees to go their own way doesn't mean you abdicate your role as an advisor. "I support my staff when they need support," says Michael Freund, president of Buist, a mechanical contracting firm in Somerset, N.J., that employs 60 people in jobs that range from administrative to construction. "When they ask me a question, I drop what I'm doing and try to support them right away."