4 Human Resource Policy

Rajeev Jain

Learning Outcome:

After completing this module the students will be able to:

• Understand the meaning and definition of human resource policy.
• Having the knowledge of the benefits of human resource policy.
• Content and source of HR policy.
• Differentiation of policy, procedure, principles and programs

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2. Definition

A policy is a plan of action. Organisations need to evolve HR policies as they ensure consistency and uniformity in treating people. Policies become benchmarks to compare and evaluate performance. They help motivate and build loyalty. A policy statement is very specific and commits the management to a definite course of action.

Each company has a different set of circumstances and hence develops an individual set of human resource policies.

HR policies provide an organisation with a mechanism to manage risk by staying up to date with current trends in employment standards and legislation. The policies must be framed in a manner that the company’s vision and HR department help the company to achieve it or work towards it.

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3. Employee understanding on HR Policy

HR Policy should be clear with employee on following points:

• The nature of the organisation.
• What they should expect from the organisation?
• What the organisation expects of them?
• How policies and procedures work?
• What is acceptable and unacceptable behavior?
• The consequences of unacceptable behavior.

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The establishment of policies helps organizations in proving that they meet the requirements for diversity, ethics and training as well as its commitments in relation to regulation and corporate governance.

For example: In order to dismiss an employee in accordance with employment law regulations, it will be necessary to meet provisions within employment contracts and collective bargaining agreements. The establishment of an HR policy which sets out obligations, standards of behavior and document disciplinary procedures, is now the standard approach in meeting these obligations.

HR policies are also helpful in supporting and building the organisation culture.

For example: Recruitment and retention policies outline the way the organisation values a flexible workforce, compensation policies might support this by offering a 48/52 pay option where employees can take an extra four weeks holidays per year and receive less pay across the year.

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4.  Benefits of policy

HR Policies have the following benefits.

• While formulating the policies the management should give a deep thought to the basic needs of both the organisation and the employees. The management must give full consideration to the prevailing practices in other organizations.

• Established policies ensure equal treatment of all employees throughout the organisation. Favoritism and discrimination are minimized.

• Policies promote stability. Though the Top management people change, retire and resign. Even then the people maintain stability in application of policy.

• The policies serve as a standard of performance. Actual performance can be compared to the policies to determine how well the members of an organisation are are performing.

• Sound and good policies help build the motivation and loyalty of employees. This is especially true where the policies reflect the principles of fair play and justice and where they help people grow within the organisation.

• Sound policies help in clarifying interpersonal, intrapersonal and intergroup conflicts.

For example:Policies and practices at LG electronics India

 LG as a brand and market leader in India attracts customers and employees in large numbers. LG has the ability to hire the best in the industry. Once these candidates are hired they undergo an extensive induction program for duration of 14days in which each and every aspect of organisation is made familiar to the  candidates. A thorough integration with HR and business processes takes place and the formulation of a KPI is done within 3days of taking the candidate on board. Customer department/vendor department interaction also takes place.

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5. Specific Personal policies

Few specific personnel policies are listed below:

The policy of hiring people

Sexual harassment policy

Probation policy

Equal employment opportunity policy

Recruitment policy

Employment category

Policy regarding training and development

Compensation and Benefits policy

Working time policy

Vacation policy

Holiday policy

Paternity leave policy

Maternity Leave policy

Loan policy

Sick Leave policy

Overtime policy

Leave policy

Policy regarding industrial relations

Communication policy

Problem resolution policy

Personal appearance policy

Conflicts of interest policy

Collective bargaining policy

Trade union policy

Grievance policy

Health and safety policy

Smoking policy

Visitor policy

Corporate security policy

Alcohol and drugs policy

6. Responsibility for policy making

The actual formulation of HR policies is the responsibility of the HR manager, but its actual approval or any change in it comes from the top management. The decision depends on the financial stability of the company, the obligations imposed upon it by legislation, the agreement between employers and employees. The executive role is that of mediating, persuading, convincing, and communicating the policy.

The HR policies should be made known to the employees through the supervisors at each level. Superiors may be informed of the changed policies by any of the following methods:

• Booklets or bulletins issued to new employees in which privileges, rights and responsibilities are mentioned.
• Verbal instructions from immediate supervisors.
• Group meetings of new employees convened regularly.
• Union contract.
• Company papers giving details about company policies.
• Conference conducted as a part of executive training program

7. Formulation of Human Resource Policy

Policy making is a complex process and it involves all levels of organization. The steps necessary in making and implementing a policy are:

Initiating a policy.

Deliberations of facts by personnel department.

Recommending and taking feedback about policy from the top management.

Writing the policy.

Explaining and discussing the proposed policy with members of the organization.

Adopting and launching of the policy.

Communicating the policy to the employees at all levels.

Administering the policy, initiating the follow-up action and evaluating it.

Re-stating or re-formulating the policy.

Figure 1: Steps in Formulating a Policy

8. Principles

Policies are guidelines for managerial decisions and actions. They vary from organisation to organisation. Principles are the universal truths generally applicable to all organizations. Principles guide managers in formulating policies, programs, procedures and practices. Some of the Principles are as follows:

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• Principle of individual development.
• Principle of scientific selection.
• Principle of fair remuneration.
• Principle of labour management.
• Principle of dignity of labour.
• Principle of contribution to national prosperity.
• Principle of participation.
• Principle of communication.
• Principle of team spirit.
• Principle of incentive

9. Procedures

For the accomplishment of the HR policies specific procedures and programs are needed.While a policy indicates What and Why, procedures indicate How, a policy is to be carried out. It tells us the methods, procedures, movements, rules and regulations of carrying out these policies and implementing them. It tells us where an action is to take place and at what stage.

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•  They are set up by Top management and followed or carried out by low level managers.

• They help in controlling the staff as they assign obligations on them for the performance of various tasks.

• They are reviewed from time to time so that the areas of slackness and the requisite changes can be done.

10. Programs

While the procedures tell us How the work is to be done. Programs tell What work is to be done. It is a plan of action controlling employees at all levels. It is the end product of philosophy, values, concepts, principles, policies and procedures. Practices and procedures can be combined in a program. Some specific programs and procedures are:

Human resource forecasting and planning.

Training and development of employees.

Management development programs.

Wage and salary administration.

Employee benefits and services.

Employment and related facts.

Communication.

Labour relations.

11. Summary

Policies are guidelines that provide an organisation with a mechanism to manage risk by staying up to date with current trends in employment standards and legislation. They vary from organisation to organisation. Sound policies help in clarifying interpersonal, intrapersonal and intergroup conflicts. The actual formulation of HR policies is the responsibility of the HR manager, but its actual approval or any change in it comes from the top management

For the accomplishment of policies there are principles, programs, procedures and practices. Principles guide managers in formulating policies, programs, procedures and practices. Procedures tell us how the work is to be done. Programs are a stable plan of action that continues over a longer period of time.

Books and References

• Jyothi, Venkatesh. Human Resource Management. Oxford University Press

• Aswathappa, K. Human Resource Management. Tata McGraw-Hill

• Rao, Mamoria. Personnel management. Himalaya Publishing House