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What is the Importance of Human Resources Policies at the Organizational Level?

March 30, 2021 Nancy Pratt

To operate a business without implementing effective Human Resource (HR) policies is like telling your people that you are not interested in creating a framework which will allow them to become successful. We cannot deny the foundational significance that HR policies have in an organization. They are not only important to sustain a viable business, but also these policies give team members the guidelines to help them feel confident about working in an organization. 

How do Human Resource policies benefit a company and its people?

Safeguard against Legal Liabilities

HR policies have the power to protect your company against various lawsuits stemming from unfair employment practices. They are crucial because many HR policies are related to a company’s obligations under federal and local regulations, so without them, the company has little defense that there is a standard. Additionally, without a policy, there may be great variations in how the company treats employee situations as they arise. This lack of consistency is a red flag which can be avoided with clear HR policies. For instance, if a company strictly adheres to the HR policies regarding progressive discipline,  team members will see the consistency with which it is handled, have a greater perception of a fair process, and feel more valued as a team member. Their satisfaction with the process puts the company in a good light, even if they may not be happy with the discipline itself. A well thought out policy and consistent execution creates less risk of disputes and escalations.

Boost Employee Satisfaction and Confidence

When you provide your team members with documented HR policies, it can improve their job satisfaction, confidence, morale and engagement. If there are no guidelines available which inform people about the company’s performance expectations, pay practices, attendance expectations, and code of ethics, the HR department can expect to be bombarded with questions often, as these are common expectations every employee wants to know. Especially in today’s world of instant access and availability of information, it is expected that an organization not only have these policies, but makes them easily accessible. Who doesn’t want to know when they will be paid, for example, or how their performance is evaluated?  

If employees are left to wonder about different company practices related to pay, promotion,  safety, harassment prevention, etc., it creates a sense of uncertainty throughout the workforce. Policies clarify boundaries which are important for all employees to understand so we are operating by the same playbook. Expecting our team members to make a  remarkable difference for our customers, to treat coworkers with respect, to resolve conflicts in a certain way, etc. is much more realistic when we have defined the boundaries in our policies. And if team members feel they are working for such an organization with little or no structure, they are less satisfied with their jobs,  feel less engaged, and suffer from low morale.

A constant feeling of dissatisfaction and poor morale leads to high turnover, which is drastic for even the most successful enterprises. There are a plethora of studies that have proven that team members who are confident about their employer are happier in their jobs and also more productive.

A Strong Support to the Strategic Direction

HR policies play a significant role in supporting the strategic direction of your organization. It depends on what your company wants to excel in. For instance, if your company wants to be known for excellent customer experience, the HR policies can be crafted with that goal in mind, to provide guidelines which address hiring, training, and retaining people who are capable of delivering a customer experience that exceeds the expectations of your customers. Policies should help leaders in the organization understand the focus and what is expected of them with their leadership responsibilities. One way to look at how policies can help to support a strategic direction is to think of this analogy. A lot of water flowing any which way is a flood; we don’t control the direction and it can do a lot of damage. But if we provide boundaries for that water, we create a direction and we guide this as a river where we need it. So our policies may encourage growth, creativity and innovation, stability etc., based on the culture and strategy we need. HR policies are crucial to help your company pursue your strategy.

Help Resolve Conflict

Effective HR policies let people know how they can handle problems at work. What workplace doesn’t have a conflict of some sort from time to time? Team members in an organization want to be aware of their options and how they can share their concerns.  If there is an issue that involves colleagues, management, or the workplace, how should they handle? Where is the outline of the steps recommended to resolve the issue at the organizational level?  – Without this guidance, a team member may escalate a minor situation unnecessarily or even quit because they don’t see an easy path to resolution. A great worker may accidentally sabotage their own career by who they decide to complain to, or share their negative feelings with others which creates bad branding. Helping team members know how and whom to approach with an issue is an invaluable HR policy to have.

In a Nutshell

Undoubtedly, HR policies play an important role in shaping the structure and culture of an organization. The Human Resources team at Etech continuously works on HR policies to align with useful  HR trends, reinforce our servant leadership culture and provide direction and clarity for all team members.  Etech’s HR policies not only support the organization’s mission and vision, but also contribute to remarkably enhancing job satisfaction in our team members. If you are interested in joining the Etech team, please click here to see the available opportunities.