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HR Policies and Procedures for Small Business

hr policies and procedures for small business

HR policies serve as clear rules and guidelines for those working within your business, supporting human capital management strategies while helping prevent legal situations that could cost it money.

Not only should your company comply with federal employment regulations, but you should also have policies in place for handling employee grievances and workplace safety. In this area it may be advantageous to enlist professional assistance rather than trying to do everything on your own.

1. Employee Handbook

An employee handbook provides an essential guide for all company policies, procedures and expectations; further minimizing confusion and legal disputes.

Make sure your handbook reflects current federal and state employment laws, updating it whenever new legislation takes effect. Involve HR professionals, managers, and legal counsel in revising it so it remains legally compliant.

Your employee handbook should clearly outline the responsibilities for each position in your business. For instance, if your employees work with sensitive information or perform physical labor, including a confidentiality policy may be essential. Furthermore, including safety procedures will help to keep workers safe.

Add benefits, like health insurance and company-sponsored retirement plans. Finally, cover policies regarding resignation and termination: explain to employees that their relationship with you is at-will while outlining severance terms in case they choose to leave.

2. Performance Reviews

An effective performance review system offers employees a way to evaluate themselves, provide constructive feedback and assist with goal setting. Utilizing software programs designed specifically for managing reviews helps streamline this process and save both time and energy by automating it further.

Reviews provide managers with an opportunity to provide candid, direct feedback about staff strengths and weaknesses, helping staff members focus their efforts more efficiently. In addition, managers are provided the chance to recognize good work as well as address any absenteeism or poor job performance issues that arise during these reviews.

Preparation is key when conducting reviews to avoid becoming confrontational and alienating employees. Managers should also be cognizant of any biases which might impact the review’s outcome, and avoid pitting employees against each other or making comparisons during reviews.

Importantly, conversations must take place in a private and neutral location without becoming an opportunity to debate salary or promotion decisions.

3. Pay

HR policies help maintain discipline within a company by outlining a clear plan on how managers should handle issues and what disciplinary actions will be taken against employees who violate them. Furthermore, these policies include employee compensation such as salaries and bonuses; plus they ensure competitive benefits that attract and retain talent.

Benefits refer to non-wage compensation that supplements workers’ salaries, such as retirement funds and private medical insurance policies. Other work/life balance perks might include gym memberships, flexible scheduling options and food/beverage allowances. Human Resource (HR) departments oversee these programs by tracking eligibility rules and assuring compliance with government regulations.

Some smaller businesses choose a professional employer organization (PEO) to handle their HR functions and gain access to group benefit rates they could otherwise not afford themselves. This arrangement provides access to group benefit plans which may otherwise prove too costly to afford on their own.

4. Benefits

HR policies are essential in creating a legal and positive work environment for small businesses, helping ensure employee engagement and development as well as regulatory compliance issues, while supporting financial success.

However, implementing and managing these policies can be challenging for a company’s leadership team. Therefore, some employers opt to outsource HR responsibilities to an outsourced third-party such as a PEO (Professional Employer Organization). A PEO acts as the stand-in employer on your business’s behalf by contracting directly with employees on your behalf; furthermore they handle payroll/tax matters, employee benefits administration, directory and document management responsibilities on its behalf.

While hiring their own HR personnel or teams may be an option for some businesses, outsourcing often proves more cost-effective and ensures compliance with labor regulations and laws. PEOs offer cost-effective solutions that save on administrative tasks while keeping compliance rates up-to-date.

5. Training

Some HR policies are mandated by employment law, such as the Family Medical Leave Act or Americans With Disabilities laws. Others are created proactively in order to guide employees, clarify organizational issues or protect business interests.

Policies may also help prevent HR issues by clearly outlining what is and isn’t allowed within the workplace, providing both managers and employees with consistency and transparency for them to follow.

HR policies can come in many forms, from employment contracts and employee handbooks to company policy manuals. HR software solutions also make it easy to deliver policies easily by consolidating documents in one central repository for easy distribution, monitoring and assessment compliance. To ensure new hires understand these documents as soon as they begin their employment and can refer back to them whenever needed later on, providing new hires with all key documents as soon as they start is also crucial in terms of success and compliance with policies in the future.

6. Termination

Terminating employees effectively and formally will reduce risk for your business, whether through self-termination, voluntary resignations or involuntary layoffs (like plant closure or sales of your business). A formal process will aid when it’s time to let someone go.

The policy should outline various forms of termination, steps in the termination process and offboarding procedures. Furthermore, severance support provisions (if necessary) should also be detailed.

Documentation is key when terminating employees in states that adhere to an at-will employment doctrine. For instance, if an employee is being fired due to performance issues, documentation could include recent manager feedback forms and any evidence of misconduct. It’s also important to remember that in some instances employees may be terminated without cause; this could be for any number of reasons such as breaking policies, insubordination or personality clashes.

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