HR Services1

HR Services1

Sunday, 2 June 2013

Do’s and Don’t while making or reviewing Company HR Policies

In continuation to my earlier post 8 common mistakes most of HR Professionals makes, today I am sharing my experience on HR policy formulation.

As HR professional, we play important role when it comes to making new policies or revise existing one. During my experience of policy formulation for various companies, which belongs to diverse industries, I have learnt many Do’s and Don’t which I would like to share with other fellow professionals and especially those who have just taken up responsibility of making HR policies for company. I hope this will help you to see other important aspects related to policy formulation and understanding that policy formulation is not just articulating some terms and conditions but a lot more than that.

Don’t neglect change in behavior pattern of employees due to policy change

 Every policy gives direction to a certain behavior pattern. Any new policy which you are planning to implement or change, you need to understand what could be possible behavioral change in employees and impact of those changes on their productivity, moral, motivation and satisfaction level.

Eg. Company don’t have any policy where short leaves are allowed and you want to change it, so that each employee can avail two short leaves in a month. Your motive of change in policy is to give flexibility to employees and you want that employees can use this in time of urgency. But there could be other behavior change which you need to keep in mind due to this change. There is a possibility that each employee is taking these two short leaves irrespective of need. They just think that it is there right to avail these short leaves. Sometime it can be a matter of loss of productivity.

Always discuss policy changes with key members of organization

Always discuss about changes in policy with key member of organization and take their views about it. They have understanding of organization culture and can give their ideas on impact of the policy under discussion. Sometime while framing a policy we neglect some important aspects hence discussion with key member will initiate a dialog on pro and cons of policy which will help all of you to understand different impact of the policy change. After taking suggestions from those key members ensure you make necessary changes. There is no harm in discussing policy change with some employees informally (on lunch table etc) to get a feel what could be possible impact if you implement it.

Cover employees of each grade

Keep every level of employee in mind. It is not mandatory that you should have a common policy for all grades of employees (barring law requirement). You can make your policy different for each levels. For example, Leave Travel Allowance-LTA eligibility can vary from grade to grade.

Need of employees on various grade is different. For example, there is no logic of announcing a policy of Company Car Lease for each grade for purpose of tax benefit. You should do it for employees who fall under 20% or 30% tax slab. These set of employees will be more inclined towards this policy as it is beneficial for them. Employees who are not in tax bracket or can save tax by simple method of tax saving, this policy is not useful at all. You can think of some other policy which will benefit them better as compared to employee on higher grade.

Pay extra attention to articulation / wording your policy

Always articulate the policy in such a way that, there is no scope of confusion. You should cover every aspect of it. It is a written document and any type of fault in writing policy can create confusion among employees and can be a reason of dispute in future. For example, while making incentive policy for sales team, word “revenue” can be a reason of confusion. If incentive policy says that a sales person will be given 2% of sale revenue as incentive, it may be understood as total invoicing value to client acquired by a sales person, which also includes various government taxes but it may not be the case. Then it is better to write “revenue without government taxes” for clarity.

Make policy on facts and figure and not on assumption

Very critical. You should do your home work before you articulate your policy. If you are making policy for local conveyance then you should know what are current rates of Petrol, Diesel  and CNG. You should also keep Car or Bike maintenance and parking cost in mind. If you are making policy of tour and travel then you should do study of hotel rates in various cities-tier 1, tier 2 etc. You should also know what is the food cost?
This will help you to answer employees, in case they have any concern over local conveyance and tour & travel policy. You can also show them your working sheets so that they can understand that policy is framed after considering and evaluating various aspects related to it. It takes time but make a policy which is logical. You will have less grievances if you do this before.

Don’t forget to communicate the policy to employees

You don’t make policies to keep it in file or computer and use it when required. You should communicate new policy or revision to employees. Policies are for employees hence should be communicated to them and in proper manner. If you are using any HR Software with ESS (Employee Self Service) module then announce changes in policy using announcement tool. You can also keep it in download section so that employee can download it as and when required. You can also keep sending it to employee after some interval of time so that they get educated about it.

Take feedback from employee both formal and informal way

Always get feedback of employees on new policy or change in policy through formal and informal channel. It is very important. Policies are for human being and every policy has an objective. If you feel that after feedback, policy is not able to achieve its objective as expected by organization, you can make changes in this to ensure it works. In worst case, withdraw the policy which are just policies and have no impact on organization in any way. Don’t hesitate.


Following is one the sample to describe what should be covered in your policy document.

Policy Number : It more for documentation purpose.

Objective of Policy : What is the objective of policy?

Applicable to : Which grade of employees are eligible for this policy. It can be for all employees

Applicable from : From which date this policy is applicable from

Applicable till : Till when this policy is applicable. If there is not end date then you can mention till next communication.

Last modified on : When did the policy revised last time.

Main Policy wordings: Write policy with all terms and conditions

Definition : You can define various words and what do you mean by it in this section. For example what do you mean by “revenue” in the policy etc.

Related Documents : You can attach various formats or forms which are mentioned in the policy.

Who has approved the policy : Designation and name of person who have approved the policy.

Please do share some other things which should also be kept in mind while framing policies and If you are looking for any specific policy, visit and register your requirement. There are many policies which are already available.

If you are really serious about learning HR and want to grow then visit our web page LEARN HR THROUGH PRACTICAL IMPLEMENTATION


Unknown said...

Great tips Govind. Employee policies must in principle be favorable to employee's benefits, without compromising on discipline.

Govind Singh Negi said...

Dear Arpita,

Right, it should be a balanced act where it is WIN WIN for both- employee and organization

Unknown said...

Very good and simple reminders!
The topic on facts and figures is key for success. In many occasions the review of policies is made/required to reduce costs and we are challenged to negotiate with suppliers or review some processes making sure the baseline is kept.
As well said, the communication has to be properly done as well as a close follow up on the impact on the employees, retention and any other deviation that was not noted on the original policy can be included (because the policies have to be as vital/alive as the company).

Govind Singh Negi said...

Dear Silvia,

Thanks for your wonderful inputs. Looking forward for your suggestions as well.

Anonymous said...

Dear Sir,
Thanks alot for sharing such valuable information.Recently i have joined a small IT company as a assistant HR, i am the first & the only HR so please tell me from where to start.


Anonymous said...

my email id

Govind Singh Negi said...

Dear Sarita,

You can go through my following blog post.

and you can post your queries on HR SUCCESS TALK Forum and take help from HR professionals.

Unknown said...

I have a query.... Mr.Govind

I have a new joining on 3rd Nov 2014.... and company given total 18 Leaves (12 (CL) and 6 (SL)).... so may i know that how many can we carry forwarded for the next year..... and can CL'S be carry forwarded or else it will be lapsed if not utilized..?

Govind Singh Negi said...

Dear Chiatanaya,

I would like to know which state you belongs to?

Leave entitlement is based on state you are in.

Also whether your company is registered under Factor Act or Shop & Establishment act

Unknown said...

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alicetaylor said...

Very helpful advice in this particular post! It’s the little changes that make the largest changes. Thanks for sharing!

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