When Scott Allison asks employees what they want from his San Francisco communications company, mentoring shows up near the top of the list. "Having a mentor program scores extremely high," says the CEO of 35-person Allison & Partners. For his part, Allison likes the way the mentoring program makes only moderate demands on his time, and costs almost nothing in financial terms. "All you do is pick up the tab for a few lunches," he says. "I think it's one of the most cost-effective things you can do for an employee."

Small business owners who are looking for ways to appeal to desirable employees and retain the ones they have would be well advised to look at mentoring. Pairing an experienced veteran with a newcomer or having someone with a particular skill take on a protégé who wants to develop it is a powerful and practical aid to hiring and retention, say advocates.

Mentoring isn't something managers do to address problems so much as to enhance the career prospects and value to the company of promising employees, says Rene Petrin, president of Management Mentors, a consulting company in Chestnut Hill, Mass. Unlike coaching, it's about building a personal relationship rather than a straightforward transfer of skills. And it can extend anywhere from several months to indefinitely in length.

Small businesses that start successful mentoring programs do it in a soft-sell way, Petrin says. Rather than demanding employees sign up a mentor selected by management, he suggests recommending to employees that they consider it and offering them a selection of mentors you've chosen. If they choose one, fine, but it's also fine if they choose someone else or do without, he says. Mandating mentorship undercuts the relationship, he warns.

"It's not about outcomes," Petrin says. "It's about the relationship. The outcomes will come if the relationship is there. If the relationship isn't there, the outcomes will be meaningless."

Select mentor recommendations by looking for fit with the worker to be mentored. If improving specific job skills is part of what you want, then seek out someone with appropriate skills, for instance. Then consider the personality. You may not want to match people identically, but in ways that are complementary. "If I have an introvert for an employee, I may not want to match the person with a mentor who's an introvert," Petrin notes.

Be sure to explain to the employee that recommending a mentor isn't a reprimand for poor performance. And explain things to the mentor, as well. Allison trains mentors to listen well and, of equal importance, to keep what they hear confidential. Mentors aren't supposed to pass to management information gained through a mentoring relationship, nor are they supposed to gossip about it with other employees. "That completely undermines the relationship," he warns.

After matching the mentor with the employee, step back. Petrin says a managed mentor relationship is not mentoring at all, but just another layer of management that won't benefit employees nearly as powerfully as mentoring. "Be clear that you don't want the person to be reporting," he says. "This isn't going to be something you're checking up on."

At the same time, mentoring does require some attention from senior management. "You can't just set it and forget it," Allison says. "You have to be following through on a monthly basis." The most common reason management attention is required is the departure of a mentor. If a single senior person leaves, Allison notes, that could leave several employees without a mentor. "You have to keep it fresh and very quickly find those people a new mentor," he says. "That can get tricky in a small company."

To make mentoring easier, Petrin says managers are turning to social networking where companies operate websites similar to MySpace, where mentors and the would-be mentored can hook up. E-mentoring, where the communications are largely or entirely restricted to e-mail and the like, is something he sees more of today, without being convinced it's the best way to go. Perhaps the highest impact move managers can make with regard to mentoring is to restrict their natural impulse to take charge of the process. "You want to facilitate the establishment of a mentoring relationship," Petrin says. "That's different from managing it."

Allison feels his company's effort to facilitate mentoring, as well as its requisite costs, is worth it in terms of keeping employees happy and contributing. "We'll keep going with it," he says. "It's something we want to continue to expand."

Mark Henricks is a freelance writer based in Austin, Texas.