All companies must develop, identify, and utilize appropriate human resource policies. These policies are a vital part of running any business. However, it is imperative that each company understands that their human resource functions must be created to meet the unique needs of that company and therefore cannot be lumped together into one tactic. Each company is different based on their size and the nature of their business which requires applicable human resource tactics based on the needs of each individual company. This paper is written to discuss the important aspects of a human resource policy for a small business of 15 to 20 employees. The aspects discussed will include employee relations and separation, employment processes and employee compensation and benefits. In order to properly explain the need for policies in these areas of human resource management, each topic will be describe in depth and rationale will be discussed as well in regards to laws and regulations associated with this area of business. A small business can create a structure that is suitable for long-term success and sustainability through developing effective human resource policies.
Human Resources Policy Research Paper
Human resource policies are defined as official rules and measures that state how specific issues should be handled within the company which also includes employee rights and responsibilities that are tied to employment law. (Grace, 2014) In the textbook, human resource policies are stated to be usually listed in the employee handbook. The employee handbook is a vital part of human resources management and in order to be effective, the handbook must set the tone for the organization’s overall employee relations policy by informing both employees and managers of both the employment policies recognized by the company as well as the procedures. (Gómez-Mejía, Balkin, & Cardy, 2012) While an employee handbook is generally more beneficial to larger companies, smaller companies can also reap the benefits of having an employee handbook however, it is less common for smaller companies to incorporate such a safeguard because issues such as lack of resources or staff. (Fragouli, 2014)
Smaller companies must be proactive in addressing the topic of human resource policies because it could largely impact their business. In 1 Peter 1-9 (ESV) the Bible tell us, “Therefore, preparing your minds for action,, and being sober-minded, set your hope fully on the grace that will be brought to you at the revelation of Jesus Christ.” This relates because if a small business wants to prepare for a bigger future they must be proactive and a beneficial way of doing so would be the execution of efficient human resource policies and planning goals. It is vital that the small business ensures their policies and goals are on track with the goal of growing their business. (Moldovan & Moldovan, 2013) Many benefits can be accomplished through setting concise human resource policies such as ensuring employees and supervisors alike are aware of the company vision as well as they develop a structure for measuring the desired goals and ensure compliance with employment regulations and laws. (Demo, Neiva, Nunes, & Rozzett, 2012) Employment Processes
Recruitment and selection procedures, employment offers, employee position transfers or promotions, and human records are all a part of employment processes. Ensuring these processes are covered under human resource policies is crucial to ensuring a successful and profitable company. The first stage in employment processes is the area of recruitment, selection and employment offers. (Gómez-Mejía, Balkin, & Cardy, 2012) One of the most common mistakes made by small businesses during this process is hiring the wrong applicants. (Jacoby, 2014) By ensuring the small business follows efficient and effective hiring practices that are outlined in the organizations human resources policies can significantly reduce the issue of hiring unqualified applicants as well as reduce issues with discrimination because the interviewers will have an outline of the correct procedure to follow. (Richards, 2014)
These processes also offer a more cost friendly option because it will result in reduced costs in the area of turnover, new employee recruitment, candidate selection, employee hiring, and productivity procedures. (Gómez-Mejía, Balkin, & Cardy, 2012) Even after the selection and hiring of staff members, the company still must ensure appropriate action is taken when it comes to employee transfers, promotions and maintaining secure and confidential records of such procedures. Human resource records, also known as personnel files, are a great tool to have when ensuring appropriate transfer and promotions decisions are being made. Personnel records should be made for every employee in order to store information such as performance evaluations, pay changes, disciplinary actions and trainings. (Gómez-Mejía, Balkin, & Cardy, 2012)
Employee processes help to create a strong workforce, improve performance, and reduce expenses which makes these processes a very important part of human resource policy because they necessitate compliance with both employment laws and regulations. When human resource laws are violated by a company, the organization can incur serious financial liabilities as well as issues with public relations both of which negatively impact the company. (Gómez-Mejía, Balkin, & Cardy, 2012) There are many employment laws that prohibit multiple forms of discrimination in order to ensure companies are operating by fair employment practices such as the Civil Rights Act, the Equal Opportunity Act and the Americans with Disabilities Act. (Smith, 2014) When a small business ensures these laws are included within their human resource policies, the company is being proactive in ensuring they are protected if any discrimination issue should arise. (Gómez-Mejía, Balkin, & Cardy, 2012)
Policies and procedures that provide guidelines and rules for both human resources processes and employees is what makes up employee relations. Employee relations cover policies that include employee attendance, mandatory dress code, steps for disciplinary action, and steps taken for work place violence. These policies lay out clear and concise guidelines for company steps and reactions to issues within these areas. By documenting the guidelines for areas such as dress code and attendance, employees are given a concise understanding of the expectations the company has for their behavior. It is vital to have a written plan of action for disciplinary or corrective actions for issues such as misconduct or workplace violence. Laying out guidelines and corrective/disciplinary action plans is advance effectively and efficient promotes positive communication, company consistency and allows for precise documentation practices. (Gómez-Mejía, Balkin, & Cardy, 2012)
Other important employment relations processes are areas such as training and career development as well as performance evaluations. The textbook describes the key role that effective performance evaluations play as they can be an essential tool to providing justification for promotions as well as terminations. (Gómez-Mejía, Balkin, & Cardy, 2012) Training and career development provides employees with the necessary skills to not only complete their required tasks for their current job but also learn new skills to meet the changing demands of the company and allow for transfer and promotion. Career development has more of a long term perspective than training does as t tends to focus on building employees abilities and versatility. (Fleisher, Khapova, & Jansen, 2014)
Employee relations policies are critical elements to be addressed within a company’s human resources policy. Including these areas allows a company to directly provide employees with guidelines, disciplinary actions as well as provide them with ways to improve their abilities. These fundamentals promote a not only a sustainable organization but also informed and educated employees. (Gómez-Mejía, Balkin, & Cardy, 2012) By incorporating performance appraisals into the policy, companies are able to comply with employment laws while also ensuring documentation backs up all actions to avoid any issues with discrimination laws as well. (Smith, 2014) Safety and Security
The incorporation of safety and security policies benefits the organization by helping to maintain a safe working environment through providing safety guidelines of the steps to take when reporting problems or concerns. The textbook discusses how a safe work environment does not just occur without the organization developing a safety plan or policy that communicates safety in many different ways. (Gómez-Mejía, Balkin, & Cardy, 2012) Developing safety plans in small business settings is more difficult because of less resources and staff but it is a vital component due to the small size. When a company is smaller, safety is more important because the loss of an employee through an injury results in reduction of productivity.
Safety and security policies help organizations provide wellbeing for their employees but they also assist the company in complying with the regulations set forth by OSHA (Occupational Safety and Health Administration). OSHA has requirements for companies, regardless of their size, that require them to provide not only a safe but also a healthy working environment while also meeting specific standards. (Gómez-Mejía, Balkin, & Cardy, 2012) When a small company develops safety and security human resource policies, the business is setting the groundwork for a safe work environment while also ensuring safeguards are placed to protect the company itself from OSHA violations. Compensation and Benefits
Compensation includes areas such as salary and overtime while benefits includes areas such as health, life and dental insurance as well as disability and retirement plans. While it is difficult for smaller companies to offer competitive salary and benefits, it provides a big advantage in retaining and attracting top employees if the company is able to provide these services. Most Small businesses that are able to offer their employees benefits tend to participate in plans with high deductibles and low premium rates. These plans require more out of pocket costs from the employee for treatment but also provide employees with the ability to deposit money from their pay which is pre-taxed in order to cover the costs. (William, 2000) A benefit/compensation option that is an easy perk for employees of smaller businesses is merit pet, bonuses and awards. (Gómez-Mejía, Balkin, & Cardy, 2012) If a smaller company is able to develop successful benefit and compensation packages for employees, the business is providing themselves with a strong competitive advantage.
It is crucial for a small business to include compensation and benefits in their human resource policy for compliance reasons as well as a way to represent fair equity. By demonstrating both fair internal and external equity, the company is able is able to display a fair company pay structure within the business as well as a relative structure to compare to that of their competition. (Gómez-Mejía, Balkin, & Cardy, 2012)There are numerous employment laws and regulations that include human resource policies that must be abided by even by small business owners. One example of such a law is that of the FLSA which requires all employers to document and report all employee pay and hours to the United States Department of Labor. (Smith, 2014) Employee Separation
Employee separation is any form of a current employee leaving their position such as resignation, termination or outplacement. (Gómez-Mejía, Balkin, & Cardy, 2012)While resignation and termination are fairly understood terms, the textbook defines outplacement as wen a company chooses to law off an employee for reasons such as reorganizing the business in order to improve the company’s efficiency or improve the business financially. (Gómez-Mejía, Balkin, & Cardy, 2012) When an employee terminates employment with a business, voluntarily or involuntarily, there are many human resources issues that can occur. Because of this possibility, it is crucial for businesses, both small and large, to provide all employees with an all-inclusive policy that clearly states the companies separation practices and the legalities required as well.
Each form of employee separation requires the company to have a specific human resources policy that addresses each separation individually in order to provide employees with an effective process and remain within employment laws. One important part of the policy that would relate to those who resign would be to conduct an exit interview to provide the employer with any beneficial information as to why the employee chose to leave and how it could be prevented in the future. (Gómez-Mejía, Balkin, & Cardy, 2012)
There are many costs associated with employee separation that could be detrimental to smaller companies. When an employee separation occurs, the company faces financial fees associated with items such as processing paperwork, advertising the open position, recruiting, interviewing and training new employees, as well as lost productivity. (Balkin, 1992) There are numerous legal issues a company can face when it comes to separations because of the employee labor laws, therefore having a human resource policy that includes the definition of employee and employer rights is a vital part of any human resource policy. There are many procedures in place to protect employees from wrongful termination that are grounded in employment laws in order to prevent employee separation in relation to issues such as discrimination or retaliation. (Smith, 2014) While there are safeguards in place for employees, there is also a law discussed in the textbook known as the Employment at Will Law which allows employers the ability to end employment for any reason at anytime so long as no laws are broken. (Gómez-Mejía, Balkin, & Cardy, 2012) Conclusion
While it is much more difficult for a small business to create human resource policies because of many reasons, it is still vitally important for the business. Creating human resource policies allows the company to be proactive in order to have processes in place as to how difficult situations will be handled within the company in order to reach long-term success. Developing effective and efficient human resource policies decreases the risk of violations of employment laws within a small company as well as the possibility of alleged violations. The elements addressed above are vital parts of any human resource policy whether within a small or large company. In Matthew 24:44 (ESV), the Bible tells us, “Therefore you must be ready, for the Son on Man is coming at an hour you do not expect.” This is a good example to compare to a company developing human resource policies because issues in the workplace can occur when you least expect it and it is vital for the success of the company to ensure you have documentation of the processes that are followed in order to protect the company.
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