HR POLICIES AND PRINCIPLES

• Policies: These are plans of action. Organisations need to evolve HR

policies as they ensure consistency and uniformity in treating people.
• Following statement is an expression of a principle or an objective:
It is the intention of the company to provide a safe plant and a healthy working
environment.
The following is a policy:
Our policy is to institute every practical method for engineering safety into our
processes and equipment, to provide protective clothing where necessary, to
train employees in safe operating procedures, and to vigorously enforce
established safety rules. Our policy is to provide a healthy plant by giving
adequate attention to cleanliness, temperature, ventilation, light and
sanitation.
Organisations should have personnel policies
as they ensure the following benefits:
• Examine its basic convictions: The work involved in formulating
personnel policies requires that the management give deep thought
to the basic needs of both the organisation and the employees.
• Minimizing favouritism and discrimination
• Policies promote stability: Continuity of action is assured even though
top-management personnel change
• Policies serve as a standard of performance
• Sound policies help build employee motivation and loyalty
• Sound policies help resolve intrapersonal, interpersonal and
intergroup conflicts
A few specific personnel policies are:
• Policy of hiring people with due respect to factors like reservation, gender,
marital status, etc
• Policy on terms and conditions of employment—compensation policy and
methods, hours of work, overtime, promotion, transfer, lay-off, etc
• Policy with regard to medical assistance—sickness benefits, company
medical benefits.
• Policy regarding housing, transport, uniform and allowances.
• Policy regarding training and development—need for, methods of, and
frequency of training and development.
• Policy regarding industrial relations—trade-union recognition, collective
bargaining, grievance procedure, participative management, and
communication with workers.
Characteristic of HR policies
• Clear and positive
• Properly written
• In-line with corporate vision & mission
• Preferably in regional language
• Known to all interested parties
• Stable but not rigid
• In-line with governmental rules & regulations
Objectives of HR policy
• Achieving Organisational Objectives
• Individual Development and Satisfaction
• Optimum Use of Resources
• Minimizing uncertainty
• Smooth Industrial Relations
• Effective Controls
Scope of HR Policies
In most companies, policies are established regarding various functions of human resource management
which are as follows:
1. Employment. All policies concerning recruitment, selection, and separation of employees are included
in this function.
(a) Minimum hiring qualifications.
(b) Preferred sources of recruitment.
(c) Reservation of seats for scheduled castes, scheduled tribes, handicapped persons and ex-servicemen.
(d) Employment of local people and relations of existing staff.
(e) Reliance on various selection devices such as university degrees, tests, interviews, reference checks, physical
examination, etc.
(f) Basis (length of service or efficiency) to be followed in discharging an employee.
(g) Probation period.
(h) Layoff and retiring.
2. Training and Development
(a) Attitude towards training-Whether it is regarded as a device to overcome specific problems or as a continuing
relationship between superior and subordinate.
(b) Objectives of training.
(c) Opportunities for career development.
(d) Methods of training-On the job or Off the job.
(e) Programmes of executive development.
(f) Orientation of new employees
3. Transfers and Promotions
(a) Rationale of transfer.
(b) Periodicity of transfer.
(c) Promotion from within or outside the organisation
(d) Seniority required for promotion
(e) Relative weightage to seniority and merit in promotion
(f) Seniority rights.
(g) Channels of promotion.
4. Compensation
(a) Job evaluation system.
(b) Minimum wages and salaries.
(c) Method of wage payment.
(d) Profit sharing and incentive plans.
(e) Non-monetary rewards.
(f) Procedure for getting pay.
(g) Whether to pay prevailing or more than prevailing salary scales.
5. Working Conditions
(a) Working hours.
(b) Number and duration of rest intervals.
(c) Overtime work.
(d) Shift work.
(e) Safety rules and regulations.
(f) Leave rules.
6. Employee Services and Welfare
(a) Types of services-housing, transportation, medical facilities, education of children, group insurance,
credit facilities, purchase of company's products at discount, company stores, social security, etc.
(b) Financing of employee services.
(c) Incentives to motivate.
7. Industrial Relations
(a) Handling of grievances.
(b) Recognition of trade union.
(c) Suggestions schemes.
(d) Discipline and conduct rules.
(e) Workers' participation in management.
Determinants of HR Policy
• Attitudes and philosophy of founders of the company, its directors and the
top management
• Attitudes and philosophy of middle and lower management
• Type of Workforce
• Presence of Employee Union
• Company’s Financial Condition
• Competitor’s HR Policy
• Past practice in the organisation
• Knowledge and experience gained from handling countless personnel
problems on a day-to-day basis
HR Principles guiding policies
• Principles guide managers in formulating policies, procedures, and
practices. Some of the personnel principles are:
• Principle of individual development
• Principle of scientific selection
• Principle of free flow of communication
• Principle of participation
• Principle of fair remuneration
• Principle of incentive to recognise and reward good performance.
• Principle of dignity of labour
• Principle of labour management co-operation
• Principle of team spirit
• Principle of Contribution to National Prosperity
Types of HR policies
• Originated Policies: These policies are established formally and deliberately by
top management. Senior executives initiate such policies to guide their
subordinates.
• Appealed Policies: These policies are formulated on requests of subordinates who
want to know how to handle some situations. The need for such a policy arises
because the particular case in not covered by the earlier policies.
• Imposed Policies: An organisation accepts these policies due to pressure of
external agencies like Government, trade association, trade union, etc.
• General Policies: These policies do not relate to any specific issue in particular.
Rather they represent the basic philosophy and priorities of top management.
• Specific Policies: These policies relate to specific issues like staffing,
compensation, collective bargaining, etc.
• Written or Implicit Policies: These policies are inferred from the behaviour of
managers. Such policies tend to be more flexible than written policies.
Process of policy formulation
• Identifying the need
• Gathering information
• Examining policy alternatives
• Getting approval
• Communicating the policy
• Evaluating the policy
• How clear is the policy statement?
• To what extent the policy is consistent with public policy?
• How well the policy reflect the company’s policy?