Which HR Policies are Essential and Why?

HR Policies and Procedures

The Business Owners Guide to Building a Strong Foundation

Leading an organisation and managing a team of employees can be incredibly rewarding but it adds another layer of complexity as your business grows.  Understanding and implementing HR policies is crucial for a successful and legally compliant workplace.

Having essential HR policies in place protects your business, strengthens your employer brand, and fosters a positive work environment. However, navigating the legalities and best practices for HR policies can be complex.

This blog will guide you through the key HR policies you need, explaining why they are and what they should cover.

Albany HR recommends the following policies as a starting point for any organisation:

  1. Equal Opportunities Policy
  2. Absence Management Policy
  3. Performance Management Policy
  4. Disciplinary Policy
  5. Grievance Policy
  6. Flexible Working Policy
  7. Family Friendly Policy

1. Equal Opportunities Policy

The Equality Act prohibits discrimination based on nine protected characteristics of race, age, gender, disability, gender reassignment, pregnancy and maternity, sexual orientation, marriage or civil partnership and disability.

Having this policy demonstrates your commitment to a diverse and inclusive workplace, outlining strategies to promote equal opportunities for all employees during recruitment, training, and career progression. Having a policy and training your employees in equality and diversity also ensures that your employees are more likely to understand their obligations to treat each other fairly and with respect.

Why it’s essential:   It is recommended and good practice to have an Equal Opportunities policy.  Research shows a diverse and inclusive workplace fosters innovation, attracts top talent, and improves employee engagement. [1]

2. Absence Management Policy

This policy outlines procedures for managing employee absences, including:

  • Reporting procedures for notifying employers of absence due to sick leave. What to do if an employee has an appointment or needs time off due to illness.
  • Sick leave entitlements and procedures for long-term illness.
  • Processes for managing potential abuse of absence and disciplinary action.

Why it’s essential: Having a clear absence management policy ensures consistency and fairness in dealing with employee absences. This minimises disruption to business operations and encourages a culture of responsible attendance. It also sets the expectations of what will happen if absences are high and how these will be managed and empowers managers to deal with absence issues when they are trained in how to use the policy.

3. Performance Management Policy

This policy establishes a framework for setting clear performance expectations, how the organisation provides ongoing feedback, and conducting performance reviews. The policy should define the frequency and format of performance reviews, allowing for constructive feedback and development opportunities.

Setting performance goals are key to gaining and maintaining great performance and the policy should outline how to set SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals for each employee. Employee input into these goals is crucial to ensure they understand what is expected of them and have a realistic likelihood of delivering.

Why it’s essential:  A well-defined performance management system motivates employees to excel, helps identify areas for improvement, and ensures employees understand how they  contribution to the company’s success.

4. Disciplinary Policy

This policy ensures fair treatment for both employees and employers when issues arise. Outlining acceptable standards of conduct and consequences for misconduct. The policy should include the process for addressing concerns with employees conduct.

Why it’s essential: Having this policy in place fosters a culture of fairness and respect. It  ensures a clear and consistent approach to addressing performance issues or employee concerns, contributing to a more positive work environment. This is often one of the most commonly used policies within an organisation.

5. Grievance Policy

This policy ensures fairness and a clear process for employees to raise concerns about workplace issues. This could be anything from feeling unfairly treated to a disagreement about working conditions.

Why it’s essential: A grievance policy fosters a respectful work environment by providing a structured path for employees to be heard and for issues to be addressed constructively. It provides a clear path for employees to raise concerns about workplace situations or treatment they feel is unfair.

6. Flexible Working Policy

A flexible working policy is essential in light of recent legislative changes which allow employees the right to request flexible working arrangements from day one of their employment, A policy offers clarity to employees and managers on the process and what you can offer as flexible working arrangements.

Explore the potential benefits of offering flexible working arrangements to attract and retain talent. This could include flexible start/finish times, compressed workweeks, or homeworking opportunities.

Why its essential: A strong flexible working policy isn’t just about employee satisfaction (although that’s important too!). It allows you to attract and retain top talent, improve employee well-being, and potentially boost productivity.

7. Family Friendly Policy

A family friendly policy offers clear guidance on all types of family friendly leave including maternity leave, adoption leave, shared parental leave, paternity leave, carer’s leave and compassionate leave. The policy should explain what pay an employee will receive during these types of leave. Including how much leave each employee is entitled to and any arrangements for when they return to work.

Today’s workforce values work-life balance. A strong family-friendly policy shows your commitment to employees facing life-changing events.

Why it’s essential: Happy employees with strong family support are more loyal, engaged, and productive.  Having more generations in the workforce also means that support for those with caring responsibilities is becoming more common. Good policies and employee support translates to lower recruitment costs, a positive company culture, and ultimately, a thriving business.

Additional Considerations for Small Businesses:

Data Protection: Ensure you comply with data protection regulations regarding employee information. This includes having a clear privacy policy outlining how you collect, store, and use employee data.

Health and Safety: The Health and Safety at Work Act (HSWA) 1974 requires all employers to ensure the health, safety, and welfare of their employees while at work. This policy outlines your commitment to employee safety, detailing accident prevention strategies, risk assessments, and training procedures. If you have more than five employees, a written policy is a legal requirement.

This list is not exhaustive and depending on your specific business needs, additional policies such as social media use policies, whistleblowing policies, or holiday policies may also be beneficial.

Albany HR provides expert guidance and support to small businesses. We can assist you with:

  • Developing and reviewing HR policies.
  • Ensuring your policies are legally compliant, up-to-date, and tailored to your specific needs.
  • Manager guides
  • Line Manager training.
  • Employee handbook creation or review.

If you need some help with policies, manager training or a staff handbook, please get in touch at letstalk@albanyhr.com or 0131 364 4186.

[1] https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/delivering-through-diversity