Human Resource Policy For Small Business

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By - 2 December 2009


A human resource policy is something that all organisations big or small should look into and have. When it comes to a small business, human resource policy is often ignored in this environment. A human resource policy is important regardless of the size of the organisation. This is especially more important if you work in the private sector.

To take it to the extreme, even before you consider setting up your small business or register the business, a human resource policy needs to be drafted. If the company has just you and another employee starting out, this may not be a critical factor. However, if you are starting with a few employees from day one, then it is important to have an effective HR policy.

Why is a HR policy a vital link in your small business? Let’s take a closer look at some of the elements you can find in the HR policy.

Human Nature

There is no doubt that all humans are individuals and when you get a group of individuals to work in an environment for 40-50 hours a week, there is bound to be personalities emerging and behaviours which may be inappropriate. With a HR policy from day one, the individuals are made aware of what acceptable behaviour in the work place is and what is not.

Compensation And Benefits

A policy will lay out the expectations you have for staff and how much they are required to work. Some jobs require travel and if this is written in the policy, there is no backlash later on. Some policies also mention working overtime. Depending on certain factors like the role, salary and work required – this determines if the staff is eligible for overtime pay or not.

A well-written policy will clearly lay out compensation for sick days and will also mention the number of days off allowed for religious holidays, parental care, death in a family etc.

Performance Appraisals

 Some companies will put it in their policies that staff may be eligible for bonus based on performance and that performance reviews will be carried out quarterly, six monthly or yearly. In this way, it does not build a false expectation for the staff that they will be legible for a bonus regardless of performance.

 Training And Development

Some companies will state that from time to time, the staff is required to attend training and development. It may state whether the staff will get time off or it is all part of the working hours. It may also state if the staff will be paid for extra training.

Safety And Health

A well written policy will include emergency procedures and empower staff to speak about hazards in the work place.

In conclusion, an effective HR policy can go a long way in making or breaking your company. And the sooner you realise this and put an effective HR policy in place, the better for you and your employees as many people find comfort in knowing that important information has been put down in writing and it adds creditability to your small business.


About the Author

Hemina Shah
Hemina Shah is a SEO consultant in Melbourne, Australia. She has written articles on various topics.