Formulating human resource policies

In an ideal situation, it is strongly recommended that an organisation formulates human resource policies that will cover all human resource management functions. These include: recruitment, selection, performance management, training and development, pay, promotion, and redundancies (Beach & Dale 1985). Emphasis on the forming of policies is common in large and medium size organisations in developed countries and less if at all present in organisations in poor countries. The formulation of policies covering almost all the aspects of human resource management functions or just a selection of a few areas like training and development depends on a number of factors, including lack of top management’s appreciation of the need for policies and resource constraints such as technical expertise and finance.

The formulation of human resource policies requires thorough preparation and commitment to provide the necessary impetus for the preparation of the policy document, its implementation and continuous review (Cherrington 1995). In fact, it is better to have no policy at all than having one that is not implementable as it will be a potential source of conflict between the management and staff and could seriously hinder productivity. Some organisations may have the expertise and financial resources required but may not have the time to go through the task of preparing human resource policies. As a result, consultants are engaged to do the job alone or in collaboration with some technical staff from within the organisation, particularly the human resource specialist. Regardless of whether the policy is formulated by the organisation or consultancy firm, some basic procedures and processes need to be followed. Figure 3.1 summarises the salient features.

Figure 3.1 Formulation and implementation of human resource policy

Identifying the need

The process of identifying the need for a particular HRP should emanate from the review of the organisational vision, mission, goals, strategies, objectives and activities on the one hand, and human resource strategies (if available) on the other. These sources may explicitly or implicitly provide the necessary starting point for building arguments for a particular HRP. For example, if one of the statements observed says that ‘the organisation strives to excel in error free products’, it means that there should be particular policy guidelines for human resource recruitment, rewards, retention and development in order to ensure the availability of staff of the quality and the size capable of producing error free products.

Developing appropriate strategies

Effective human resource polices will also depend on the ability to identify and use appropriate strategies to establish the foundation for generating relevant human resource policy documents. Such strategies include:

Seeking top management opinion and support

Human resource managers as partners in human resource functions have an obligation to seek support from the top management in order to get the necessary resources and commitment. For example, a policy on certain financial incentives will affect the budget and the wage bill while the interest of the top management is to reduce costs. To win top management support and commitment requires a well written proposal, strong and convincing arguments and sometimes lobbying. Early management inputs to the policy will reduce resistance at later stages.

Seeking middle level management opinion

Middle level managers are the implementers of policies. For instance, implementing a particular component of health policy could lead to a higher workload for the remaining staff; some kind of reward may be required in order to keep work performance at the same level. Therefore, the implementation of one policy may affect another policy or create room for the improvement of other policies. When such effects are noted early enough, it becomes easier to foresee policy consequences and provide some policy clauses to cover such possible policy overlaps or shortfalls.

Assessing awareness and the level of policy desirability

The introduction of any policy in an organisation will change the way employees see their relationship with their employer. Some employees may feel that the policy is not good enough because it does not sufficiently take care of their interests. Despite the fact that this perception may be incorrect, it still affects the way the policy is received by staff, as well as the ability of the policy to meet the intended objectives. Opinion surveys can be used to assess employees’ awareness of policy gaps and the extent to which a particular area of human resource functions require policy or policy instruments.

Assessing other factors

There are a number of other factors that may facilitate or hinder the adoption and effectiveness of the day-to-day implementation of the expected policy. This will cover resources, legal issues, trade unions and the working culture.

Drafting policy document

The above strategies will provide the necessary data and information for drafting the policy document. Usually, the policy document will have a number of sections that point to specific aspects of the policy. Such sections may include:

Policy title

The title of the policy has to be clear, focused, short and without ambiguity. It has to reflect the contents of the policy itself.

Definition of key terms

Any policy will have specific terms, concepts or acronyms that have to be clearly defined so that all key stakeholders including management and staff will clearly understand what it means. This will minimise conflicts that may arise out from misinterpretation and misunderstanding.

Purpose

The best way to establish the purpose of a policy is to ask the question. ‘What would happen if the organisation did not have that particular policy in place? The policy has to be outcome based. That is, what will be achieved at the end of the day if the policy is well implemented? Usually, the purpose is established from the review of the strategic plan by using specific tools such as stakeholders’ analysis, problem tree, or mapping.

Relevant sections of the policy

Since the policy will aim at addressing specific aspects of particular staffing functions, each of the aspects have to be sufficiently covered by giving specific policy statements, roles and responsibilities, of each of the key stakeholders’, rewards and sanctions.

Annexes

Usually annexes are in the form of policy instruments or references to particular sections of certain relevant laws. For example, well designed forms for filling in (if required), extracts from employment law.

The qualities of a well drafted policy are many and cannot be adequately covered here. However, there are some general principles that could be used to differentiate between a strong and weak human resource policy:

1. It has to be linked to corporate mission, values, objectives and strategies of the organisation. For example, if the organisation mission is to excel in the production of quality products in a particular industry, a policy on remuneration should show how it could attract, motivate and retain the best people.

2. It has to complement other policies in addressing human resource management issues. It is natural to see for example, a training policy complementing a promotion policy because training will provide the necessary competencies required for higher positions.

3. It has to be flexible but robust enough to match the changing business environment. It may be unrealistic to think that a policy will sufficiently cover certain aspects of human resource management functions at all times. In order to give managers some flexibility in decision making, it is important that there are some policy provisions to help managers make sensible decisions without faulting the fundamentals.

4. It has to be realistic and implementable. Unrealistic policy may raise unrealistic hopes, it may look futile if implemented and may even demotivate staff. It is important that before a policy is approved, its utility is assessed by looking at the real working environment and other intervening factors.

5. It has to be clear, unambiguous, and objective. Lack of clarity and the use of ambiguous concepts, verbs and phrases create room for misinterpretation of the same policy by different managers in the same organisation. The consequences may include lack of consistency in handling policy issues and subjectivity in treating individual members of staff.

6. It has to be accessible to all staff. A policy document has to be available for reading, discussion and referencing for all employees. If the organisation has a library or lounge, it will be useful to display some copies of the policy for reading.

7. It has to be open to continuous review and improvement. For organisations with strategic plans, operational plans and annual action plans, such plans may include review of human resource policies. The reviews have to be participatory in order to ensure that all key stakeholders give their opinions on the appreciation or limitation of the policy or sections of it. The spirit should be one of continuous improvement rather than criticism.

Therefore, to ensure that a policy meets the criteria described above, the draft policy document has to be discussed by all key stakeholders including general workers, trade unions, employers’ associations, and all levels of management. Stakeholder involvement at this stage is a critical factor for not only improving the quality of the policy itself but also, and more importantly, for its smooth implementation as it will create a sense of ownership for all the parties involved.

Policy implementation

The modality and pace of the implementation of the policy will depend upon many factors including the extent to which the need for the policy is established, strategies used to involve different stakeholders during preparations and the technical quality of the policy document. The most successful organisations implement policies after a series of sensitisation seminars and workshops covering top, middle and lower level management as well as employees and employees’ associations. This helps to create a common understanding and a sense of ownership for all key stakeholders. While policy implementation will mainly be the responsibility of line managers, the human resource department will provide support and technical services.

Monitoring and evaluation

Policies are there to assist organisations and not vice versa. Continuous monitoring and evaluation is necessary in order to remove rigidity that may match the emerging situation and needs. For example, a change in organisational vision, mission and objectives, or a change of government policies and laws related to employment relationships or the labour market may make it necessary to look back at human resource policies and see how they may better assist both the organisation and the employees.