HR policies make or break companies

Why is HR policy important? Employment is a contract between the employer and the employee. Under the contract, the employer is supposed to provide certain things and the employee in return contributes to the organisation’s growth. Human resource (HR) policy is one of the most important instruments through which the employer communicates his offer, employee benefits and rights to the employee. It also lists the expectations from the employees.

The HR policy should be shared with the employee before they accept the job offer. This is a good recruitment practice, because then the probable employee can look at the organisation holistically and decide whether to join or not. An employee shouldn’t join the job only on the basis of job description and salary. 

However, we have to recognise that the current HR policies were written 20 years ago and the generation employed at that time was different from the one working today. Now, those policies need to be reviewed.

The generation currently working is generation Y, born between 1977 – 95. Generation born after 1996 is the generation Z aka the iGen and they will join the workforce soon. Gen Y is prominent in companies, but unfortunately the HR policies are no longer attractive to this generation.

In TMI Network, a recruitment consultancy, we have a policy on paternity leave which can be taken by a new father and bereavement leave which can be availed after the demise of an immediate family member. These policies were written in the recent past as our employee mix kept evolving.

Entitlement and Benefits: This is the first group of HR policies and under this,policies regarding leaves, compensatory off, overtime, incentives etc are covered. ‘Entitlement’ includes different kinds of leaves and vacations. For example, to get casual leaves, one doesn’t have to give notice, but privileged leaves require prior notice from the employee.

Casual leaves and sick leaves of an employee can’t be denied. While the benefits include provident fund contribution, gratuity, medical coverage are specified.

Enabling Policies: Second grouping of the HR policy focuses on creating a good work environment. For example, ‘flexi-timing’ gives employees and employers to work out something that is mutually convenient. While maternity leave is a part of entitlement, paternity leave is an enabling policy. These policies say that the employer is keen on their employees’ personal growth and work life balance. Work from home and sabbaticals are also enabling policies.

If the company’s and employees’ priority have a common ground, then the company can dole out benefits to the employees. For instance, if you undertake a certification course in your area of work, the company reimburses the fee on completion of the programme. Some companies have book reimbursement policies. Another enabling policy at TMI is that women employees can order food for their families if they work beyond 9 pm.

Obligations of employee: HR policies also spell out things like discipline, telephone and internet usage, sexual harassment, tea breaks etc. For example, Reliance has a policy that an employee must be reachable on the phone anytime.

The more you review your HR policy, especially to make it motivating to Generation Y, the better. There are many Marwari companies, who outrightly say that it doesn’t matter whether their HR policies are motivating or not, it’s more important that the company has uniformity.

When companies have a common policy for all without flexibility, it becomes demotivating for the employees. Employers fear that the employees may take advantage of any flexibility that they might provide. Like at TMI, we have an option of leaves under ‘restricted holiday.’ This is given as a benefit to employees to suit their needs. For example, one can take it during Diwali or Christmas or Ramzan. Under this, the employees can put the number of holidays on the restricted list as optional holidays.

Human resource policy of a company stems its philosophy. Does it believe that employees are the critical components, does it believe that motivation of employees and their engagement is crucial to the growth of the company? If a company believes in these two, its HR policy would be proactive and contemporary and relevant to the kind of population it has.

(The writer is Head HR, TMI Group)