The human resource policy of a company is a set of rules, procedures and guidelines that govern the company's interactions with its employees. They flow from the overall strategic plan of the company, and are usually developed in consultation with middle management and other employees. The human resource manager or department is responsible for compiling, maintaining and administering the human resource policies of an organization.


HR policies, usually documented on a company’s Intranet, are important for several reasons: First, they are a one-stop shop for employees looking for information on various company policies, such as recruitment, promotion, retirement, compensation and training. Second, they provide a framework for the human resource department to design and administer personnel development programs and train new employees. And third, they provide structured compliance with local and federal government standards and regulations.


The complexity of a company's HR policies depends on its size and base of operation. Components include the mission statement, guidelines on ethical and responsible conduct, hiring practices, grievance procedures, compensation structure, financial support for continuing education, rules for sick and compassionate leave, and the company's anti-discrimination and anti-harassment policies. Workplace health and safety are also important parts of HR policy, including guidelines on operating heavy equipment and emergency evacuation procedures.


The London-based business consultancy firm International Charter suggests that small and start-up businesses should get their HR policies operational as quickly as possible. They recommend issuing policies in bunches to avoid disrupting operations or sensationalizing specific issues. Management should communicate the reasons for each policy. For example, workplace safety policies might be mandated by government legislation, while policies banning use of social media at work might be designed to prevent computer virus attacks or loss of sensitive data. Employee training, including orientation for new employees, is important for ensuring compliance and protecting the company from potential legal action. Employee input should be solicited when designing the policies to make the implementation process simpler.

Considerations: The HR Value Proposition

The human resource function achieves value not by imposing rules and guidelines on employees but by finding out what the key stakeholders believe and require. Human resources work begins with the business, not with the HR department, University of Michigan professors Dave Ulrich and Wayne Brockbank wrote in a Harvard Business School Working Knowledge article containing excerpts from their book titled "The HR Value Proposition." Policies should be designed to invest in business practices that deliver maximum value and ensure that employees have the skills necessary to respond to short- and long-term market requirements.