DU SOL B.Com 3rd Year Human Resource Management Notes Chapter 4 Human Resource Policies
What is human resources policy ? What are its components ?
“A policy is man-made rule or predetermined course of action that is established to guide the performance of work towards the organisation objectives.” Explain.
Human Resource Policy – Meaning And Contents:
A policy may be defined as statement or general understanding which provides as guidance to decision-making to members of an organisation in respect of any course of action. Personnel policies are well defined intentions of the management with respect to manpower management in the organisation. Human resources policies indicate the objectives or the established course of action to establish management’s relationship with the employees of the organisation. Following are some important definitions of human resources policies.
According to Richard P. Calhoon, “Personnel policies constitute guide to action. They furnish the general standards or basis on which decisions are reached. Their genesis lies in an organisation’s values, philosophy, concepts and principles. ”
According to Edwin B. Flippo, “A policy is a man-made rule or predetermined course of action that is established to guide the performance of work towards the organisation. It is a type of standing plan that serves to ’ guide subordinates in the execution of their task. ”
In the words of Haynes and Massie, “Policies include that body of understanding which makes the action of each member of the group in a given set of circumstances more predictable to other members.
According to Koontz and O’Donnell, “Policies are general statements or understanding which guide or channel thinking in decision making of subordinates.
According to Industrial Relations Glossary, “Labour policy is the principle or objective established by a company for the guidance of the management in its relations.
In short, personnel policies are the statement of objectives for the guidance of management in its relations with employees, policies are pre-determined courses of action. They reflect the recognised intentions of the top management and guide to the subordinates in the execution of their task.
Characteristics Of Personnel Policy/ Hr Policy:
Following are characteristics of human resources policies:
- A human resources policy is formulated in the context of organisational objectives.
- A policy may be in writing or it has to be interpreted from the behaviour of organisation members particularly people at the top.
- Policy is formulated through the various steps in the decision¬making process.
- A policy provides guidelines to the members in organisation for choosing a course of action. Thus policy provides freedom in choosing their action.
- Policy formulation is a function of personnel department in consultation with line managers. However, top management has important role in policy-making.
- Policy statement should be positive, clear and easily understood by everyone in the organisation so that what management wants is clear.
- It provides two way communication system between the management and the employees so that the employees are kept informed of the latest developments in the organisation and the employers are aware of the actions and reactions of the employees on particular issue.
Contents Of A Human Resources Policy:
The primary objectives of a personnel policy are to promote the maximum individual development, to develop techniques for maximum use of human resources and to create good industrial relations. Therefore, a human resources policy should contain the principles, techniques and practices which may help the management to fulfil these objectives. The contents of a personnel policy may vary according to the needs of the organisation but following items should be contained in the personnel policy of a large organisation.
- Name of the Company along with development of the company and details regarding management personnel.
- Procedures and techniques of selection including sources of recruitment and methods of recruitment, reservation of seats, qualifications required, basis of selection merit or seniority, probation period etc.
- Working conditions such as working hours, authority levels, channels for promotions, transfer, rules regarding suspension, retirement, holidays, leave, overtime, work, duration of intervals etc.
- Training Programmes i.e., full details regarding planning objectives and methods of training for new and existing employees.
- Procedures for handling grievances – to whom employees should contact and when, where and how.
- Rules and regulations regarding accidents, unfair terminations, discipline and Standing Orders.
- Joint Consultation – its methods and procedures.
- Line of authority relationship and line of communication.
- Collective bargaining – full particular regarding representation in collective bargaining.
- Industrial Relations – details regarding maintenance of industrial relations i.e., notice period for the strikes and lock outs, rules for declaring strikes and lock outs illegal, rules regarding recognition of trade union, discipline and conduct rules, workers participation in management.
- Labour welfare and service activities – such as education, entertainment, canteen facilities, financial assistance, profit sharing, provident fund, compensation for accidents etc.
- Compensation. Method or procedure for fixation of pay. Methods of wage payment, incentive plans-how to implement, non-inonetary rewards etc.
What are the objectives of personnel policy or Human Resource Policy ?
What is the importance (or needs) of Human Resource policies ?
Importance Or Objectives Of Personnel Policy Or Hr Policy:
The management of an enterprise determines its objectives and seeks to achieve them by various types of business activities. Before commencing these activities, the management considers various alternative course of action which may help in achieving the desired objectives and choose the most suitable method to it. The importance of policy lies in systematic approach of determining a course of action to be undertaken in an organisation in future. Policy substitutes thinking for worry. The effectiveness of human resources policies should be measured in the light of their objectives for which they are formulated. The objectives of human resources policies are listed below:
1. Attention on Objectives of the Organisation – Organisations exist to pursue and achieve certain objectives. Personnel policies make these objectives more concrete and tangible by focussing attention on those so that all organisational activities are directed towards these objectives. Thus policies help in providing guidelines for the individuals in the organisation to work on smooth lines.
2. Maximum Individual Development and Satisfaction – Individual development and satisfaction is the primary objective of personnel policies. Personnel policies should ensure an effective cooperation among employees so that better results may be expected. Management should consider social values and employees’ aspirations in formulating personnel policies. A good system comprising monetary incentives and non-monetary incentives is warranted. It will promote cooperation and loyalty.
3. Maximum Use of Resources – Another important objectives of human resources policy is the best maximum use of human resources. Man is the only active factor of production which engages the other factors of production to work. Individual development of employees is advantageous only when they are used in the best possible manner. So, maximum individual development and the maximum use of human resources is the primary objective of the human resources policy. Other factors of production are ineffective without effective moulding of human resources. Human resources are made to work efficiently by personnel policies.
4. Offsetting uncertainty and change – Future is always full of uncertainties and changes. The organisation has to function in various types of uncertainties. Some of the uncertainties and changes can be predicted on the basis of forecast especially in personnel area. Personnel policies foresees the future and makes provisions for uncertainties and changes. For example, strike, lock out, mechanisation, transfer of personnel from one place to another etc. Personnel polieies ensure uniformity in decisions.
5. Good Industrial Relations – Human resources policies help in maintaining good and harmonious industrial relations. Personal policies are developed for creating good human resources relations. Human resources policies facilitate uniformity in decisions and avoids workers’ exploitation through biased decision. Human resources policies make employees aware of the objectives of the organisation and guide the workers in achieving them. So that they can enthusiasticallly and with loyalty.
6. Better Controls – Control involves the measurement of the accomplishment of events against policies and the correction of deviations to assure attainment of objectives according to policies. Personnel policies provide standards against which the accomplishments are evaluated. Thus personnel policies facilitate the function of control.
7. Prompt Decision Making. Carefully defines human resource policis serve as a guide for decision making on routine and repetitive matters. They prevent wastage of time and energy for solving the problems of similar nature.
Describe an ideal human resource policy.
Ideal Human Resource Policy:
There is no rigid standard to prescribe an ideal or a sound human resource policy because it is based on circumstances peculiar to an organisation. However, following are some characteristics of an ideal personnel policy which are universally applicable.
- Relationship to Objectives – The human resource policy should facilitate the attainment of organisational objectives and plans. Policy should reflect the intention of management.
- Clarity – The human resource policy should be clear, definite and explicit leaving no scope for misinterpretation. Policy should minimise the number of problems where decisions are based on personal judgement.
- Written. The policy should be written, A written policy generally becomes more clear and definite and its communication is very easy. Besides, it speeds up administration by reducing repetition to routine and brings consistency in organisation.
- Consistency – The human resource policy should be consistent i.e., the functions and the activities in the policy must be in agreement. Further, the policies must result in stability over a considerable period of time.
- Flexibility – A human resource policy should be flexible i.e., policy should be revised from time to time to meet the new situation without disturbing present norms and trends.
- Communication – A human resource policy should be clearly communicated in the organisation so that individuals who have to take decisions in the framework of the policy statement understand it clearly.
- Participation of Subordinates – The responsibility of laying down policies though, lies with top management, the lower levels must be consulted and due weightage should be given to their advice.
- Control – The policy to be effective, must be controlled which requires its periodical review being up-to-date, reflecting organisational objectives and plans in- changing situations, consistency, flexibility and applicability.
- Acceptability – The policy should be acceptable to all those for whom it has been formulated. It will reduce disputes and help in maintaining discipline in the organisation.
- Compromise with overall policies – Human resource policy should not be against any other policy of the organisation. Thus, it should be within the framework of overall policy of the organisation.
- Integration – As all people are different in nature and character, the personnel policy must integrate characteristics of all people at work.- It must take into account the differing capabilities, capacities, interests, aspirations, beliefs and temperament make up of the people.
- Uniformity – Personnel policy should be uniform throughout the organisation subject to variations according to local conditions.
Thus, personnel .policy must possess the above characteristics but before evolving such a policy. Trade unions and other concerned departmental heads should also be consulted.
How is a personnel policy developed ?
What are the various steps in policy formulation and administration ?
Formulation Of Human Resource Policy:
The development of human resource policies depends upon the day to day problems arising in an organisation and their solutions. The main purpose of formulating the personnel policy is to assist top executives in reaching the decision in a given situation. Following are the principal steps in policy formulations :
1. Initiating the need. If an organisation does not already have an appropriate human resource policy, the human resource manager should feel its need or he should hear of its need. Then he should start thinking about it. He should also convince the chief executive of the need of human resource policy. Such initation may be taken by the staff or trade union.
2. Fact-finding. After the chief executive has approved the idea to formulate a policy, the next step is to collect facts for its formulation. Facts may be gathered from any of the following sources:
- Past practice in the organisation.
- Prevailing practice among the companies in the community and throughout the nation in the same industry.
- The attitudes and philosophy of the top management as well as of middle and lower management.
- Knowledge and experience gained from handling countless personnel problems.
The human resource department should study existing documents survey industry and community practices and interview people within the organisation to collect appropriate information widespread consultations and discussions at this stage prove helpful in implementing the policy.
3. Putting the policy in writing – After gathering all information the personnel department can begin the actual work of formulating the written expression of company personnel policy.
4. Getting Approval. The human resource department will refer the policy draft to top management for approval. The management is to see whether the policy draft truly represents the organisations objectives. If it is satisfied, it will approve the policy with or without any modification.
5. Communicating the policy – The policy once formulated should be communicated throughout the organisation. A real education programme should be set up to teach people how to handle various personnel problems in the light of this newly formulated policy. Special attention should be paid to social customs and values, aspiration of employees, labour legislations etc.
6. Evaluating the Policy – Policies provide the future course of action. There may be situations where organisation is not getting the expected results. This requires modifications in the policies. The top management should have full information on the experience of those who are guided and affected by policies as well as about situational changes. On this basis, top executives decide whether there is a need to reformulate the policy. So, human resource policies should evaluated from time to time and necessary modifications should be incorporated if necessary.
Explain various types of personnel policies.
Types Of Human Resouces Policies :
Policies may be classified as under:
(A) On the basis of Sources of Policy – Following are the types of policies on the basis of sources of policy.
1. Originated policy – Such a policy is usually established formally and deliberately by top management for their subordinate’s action as well as their own action. It is originated in the broad framework of the objectives set and defined by top management.
2. Appealed Policy – Such a policy’ is one that arises from the appeal made by subordinate to his superior for deciding an important case or problem. The need for such policy arise because the particular case or problem has not been covered by earlier policies.
3. Implied Policy – These are the policies which are not formally stated. Policies are inferred from the actions of the superiors. It is not a good policy. In the absence of any written promotion policy, it can be inferred from the way the promotions have been or are being made in the organisations.
4. Imposed Policy – Imposed policy is one that arises from the influence of some outside forces like government, trade unions, trade associations etc.
For example, the policy that nobody below the age of 14 will be employed is adopted due to the compulsion provided in the Factories Act.
(B) On the basis of Scope of Policies – Following are the types of policies on the basis of scope of policies.
1. General Policies – Such policies are formulated at the top. They describe the philosophy of top managers and their acceptance of various theories of work and organisation. They tell everybody about the priorities which the top managers want to be assigned to various factors influencing performance. Such policies are called general because they do not relate to any specific issue in particular.
2. Specific Policies – Specific policies relate to specific issues. Thus, there may be separate specific policies on staffing, compensation, training, collective bargaining. These policies may be formulated by the personnel manager himself although others may also exert a great deal Of influence in shaping them.
(C) Another classification of policy is major and minor policies.
1. Major Policies – Major policies pertain to the overall objectives, procedures and control which affect an organisation as a whole. These policies cover all broad areas in personnel activities. Such policies are generally framed by the top executives or Board of Directors,
2. Minor Policies – Minor policies on the other hand cover relationship in a segment of an organisation. Such policies are generally outgrowth of major policies.