When it comes to running a business, it is important to have standard HR policies and procedures in place, as these will help to protect your business and your employees. Many small businesses will start without any formal policies or procedures, however as the business grows, the need for these policies and procedures will soon become apparent.
HR policies and procedures will help to protect your business from a legal standpoint, as well as supporting the smooth day to day running of the business.
It may seem like a complex process to get these in place and quite often, it is, but it is worth the effort, if you really want to protect your business. The importance of policies and procedures is such that if you fail to implement these, you could find yourself being called to employment tribunals, which is never a good move for any business. It can be a financial headache and can affect the company branding, so it is worth putting in the effort to devise your processes and procedures from the offset.
Standard HR policies will offer advice for staff on their employment, while procedures will go into more detail on HR policies. Policies and procedures are usually presented to staff in the form of employee contracts and/or handbooks, as this helps to maintain a legally binding relationship and gives the employee a frame of reference, whenever they need to check any details of their employment.
What Your Business Needs
You may not know where to start, but these standard policies and procedures should give you a good indication of the most important policies and procedures to implement in your organisation.
Each and every business will have values and beliefs, which help to build the right culture for the business. Your policies should detail what your values are and should also include your mission statement. This will help to ensure your employees know exactly what your business stands for and where it is heading, so that everyone is working to the same, common goals. Every business has a specific type of culture and it is important that everyone is united in supporting this.
There are very strict laws in place now when it comes to equal opportunities, so it is imperative that you have information on these in your policies. The typical types of equal opportunities policies will include anti-harassment and non-discrimination. These policies will not only offer protection to your employees, but will also help to keep your business safe. The law is constantly changing when it comes to equal opportunities and as such, companies need to keep up-to-date and amend policies, as and when required.
Your employees need to be aware of what is expected of them, otherwise, they will never be able to meet with your expectations. The typical examples of conduct would include dress code, use of internet and mobile, as well as processes and policies for time keeping and what to do in cases of lateness.
Your policies should contain detailed information on holiday entitlement, i.e. the number of holidays permitted per year and any public holidays in addition to this. There should also be information on the procedures for taking holidays. For instance, the amount of notice staff are expected to give when requesting a holiday and whether or not they are allowed to carry any holidays forward into the next year. There should also be policies on jury duty and bereavement leave and processes with details on what to do in these cases.
Hours of Work
The policy should state the hours of work expected by the employee each week and the working hours. It should also make reference to overtime and whether or not this will be expected. Companies offering overtime should also state how regular they expect this to be and what the rate of pay will be. If the working hours are different each week, it should state the expected pattern, but mention that there will be flexibility.
Most companies stick to a standard protocol when it comes to sickness (i.e. no more than 3 days sickness per year.) However, some have higher expectations than others, so it is important to state what your expected levels are. There should be a policy in place which details your expectations when it comes to attendance and procedures for staff who are unable to attend i.e. what time they should call in and whether they should call every day or only the first day of absence. These points may be taken for granted but it is important to be clear about your policies in relation to attendance, otherwise you won’t have any standards set.
Most companies will have some kind of performance management process in place and this allows them to ensure employees are performing at a level that both parties are happy with. The performance management process should be outlined in your policy, with details which include; the expectations you have of the employee, what goals they should be working towards and what these are in relation to the overall goals of the organisation. The procedures should contain detail on the regularity of performance management and what to expect during the process, so the employee is not in for any kind of shock.
Disciplinaries and Grievances
When it comes to dealing with people, there are all sorts of issues which can arise and as such, it is important to have policies and procedures in place to manage these expectations. For example, the grievance and disciplinary procedures should be outlined, so there is no room for confusion. You may also want to mention the termination process and what this will look like, should the worst happen. Unfortunately, disciplinaries and grievances seem to be commonplace in most workplaces these days and if you fail to have a process in place, you could find that your business will end up being severely compromised. It is not worth the headache, so take time to put these in place and you won’t need to worry when the time arises.
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What are my Legal HR obligations?
Going through employment laws can be overwhelming, but it must be done. It will save you the trouble of facing an Employment Tribunal claim or paying compensation, should you miss out on anything.
For your HR function alone, there’s a lot to cover between the employment contracts that you need to present to the proper dismissal procedures. To give you an overview of what to expect, here’s a rundown of some of your important legal obligations.
- You must present every employee with a written statement of basic terms and conditions within two months of their start date. The contract needs to be signed and dated by both parties. It should state the job title or description, pay and pension to be received, work hours, grievance, disciplinary and appeal procedures and notice periods, among other details. You cannot change any of the terms without the employee’s consent.
- You must comply with the legal requirements on minimum wage, paid holidays and maximum working hours. Prepare an itemised pay statement that indicates the employee’s gross salary and net pay as well as the deductions. For paid holidays, the minimum is 5.6 weeks. For time at work, the limit for most jobs is 48 hours per week. Sick pay is granted to employees starting on the fourth consecutive day that they are off sick. Leave should also be permitted for emergencies involving a dependent, public duties, training and union activities.
- You must respect employee rights. These include letting staff join a union and making sure they have a safe and comfortable workplace. Pregnant women and new mothers are entitled to some time off and maternity pay, depending on how long they have been working for you. New fathers and adoptive parents enjoy similar benefits.
- You must not discriminate against any of your employees (or prospective staff) based on race, ethnic origin or nationality, gender or sexual orientation, marital status, age, disability, and religious or philosophical beliefs. Keep in mind that you can also be held liable for acts of discrimination by members of your staff or visitors to your workplace, as well as complaints of bullying and harassment.
- You must set out in writing the procedures relating to grievance and disciplinary issues. An orientation on these policies should be conducted to keep employees informed. Managers will also need to undergo training to ensure that such matters are handled properly.
- You must be reasonable and fair when it comes to dismissing employees. For redundancies, follow the corresponding procedures and provide the necessary payment to those who have been on the job for more than two years.
- You must take note of local employment laws when conducting business internationally, including those involving the management of staff travelling to or assigned to that country and the hiring of local employees.
These are just a few of the many legal obligations you have as a business owner. To ensure you are in full compliance, consult an employment lawyer or law service. Remember that ignorance is not an excuse, so staying informed is key to fulfilling your responsibilities.
The Dangers of Neglecting HR
High Turnover, Low Productivity
One of the HR processes that are often bypassed is staff development. According to a study by breatheHR, an online HR system, many small and midsize businesses do not give staff training and career progression the attention they deserve.
Of the surveyed workers, almost half admitted their bosses do not give serious thought to the development of their skills. Several even implied that no one had ever sat down with them to talk about the future of their career in the company.
How does all this impact an organisation? Without a long-term focus, career-wise, employees tend to lose motivation. Unengaged workers are more likely to leave the company or become less productive.
Providing staff with development support can also help you find the best fit for a key position. The “perfect” resume may never come along. So instead of wasting time waiting, why not invest in training current employees so they can gain the expertise that the job requires?
Growth and Stability Threatened
Another HR aspect businesses tend to overlook is people issues, especially when major changes are taking place.
A survey by the Chartered Institute of Personnel and Development revealed that, where company acquisitions and mergers are concerned, people issues are not sufficiently addressed during the post-transaction stage. Few are assigned to provide advice to involved parties and those individuals, often accountants and lawyers, usually do not have a good grasp on people issues.
What is the typical outcome in such scenarios? Morale among staff goes down and with it, productivity. Ultimately, the success of the venture is threatened.
Lack of Protection
Skipping some of the HR basics can be a costly mistake as well. Not having an employee manual, for instance, makes your business vulnerable to complaints from disgruntled employees who have been dismissed from work. They may have violated company procedures, but if those policies are not set out in writing, they could easily fight back. An employee handbook could be your best defence.
For businesses that handle confidential clients or information, a no-compete statement is absolutely necessary. If you fail to have your employee sign one, your company is not legally protected should that employee leave the organisation.
Budget restraints, along with the economic downturn, may have forced you to relegate HR to the background. But once things turn up for your business, reconsider investing money and time in HR so you can cover all its key processes. Doing so might just give you that competitive advantage you’ve been seeking.
Make sure your business is HR compliant and safe!