Operating a business without HR policies is essentially saying to employees that you are not interested in creating a framework that shows them how to be successful in their jobs. Employees might not perceive it quite that harshly, but absent the structure that HR policies provide for an organization and its employees, running your company will be quite challenging.
The importance of HR policies cannot be overstated — they are critical for sustaining a viable business and for giving employees the guidelines they need to feel confident that they are working for a purposeful, principled organization.
Protection Against Legal Liabilities
HR policies can protect your company from liabilities concerning claims of unfair employment practices. They are important because many HR policies are related to a company's obligations under federal and local laws and regulations. For example, HR policies related to minimum wage and overtime — provided your company strictly adheres to them — can demonstrate that your company pays employees wages in accordance with applicable laws.
In addition, your company's HR policies that prohibit discrimination based on age, sex, disability, veteran status, marital status and other non-job-related factors are part of your organization's legal defense should anyone ever allege that you engaged in unfair employment practices.
Employee Satisfaction and Confidence
Providing your employees with written HR policies can improve their job satisfaction, confidence and, ultimately, their morale and engagement. Without guidelines that inform employees of the company's performance expectations, pay practices and code of ethics, your HR department could be bombarded with such questions as "When will I get a paycheck?" "How do I get promoted?" or "To whom do I report harassment?"
Leaving employees to wonder about company practices concerning pay, promotion and safety causes uncertainty throughout the workforce. Employees who feel they are working for an organization that has little-to-no structure might be less engaged, and have poor job satisfaction and low morale. Dissatisfaction and poor morale can lead to turnover, which is a costly proposition for even the most successful businesses. Employees who have confidence in their employer might be happier in their jobs, and according to a plethora of studies, happier employees are more productive employees.
Supporting the Strategic Direction
HR policies support the organization's strategic direction, and consequently, the company's growth and ability to sustain operations. For example, if your company's goal is to become known for superior customer service, the HR policies will have guidelines for hiring, training and retaining employees who provide customer service that exceeds your customers' expectations. Therefore, HR policies as they relate to recruitment, training and retention are critical to benchmarking your company's overall success.
From an employee's perspective, HR policies that support the organization's mission and purpose can further enhance job satisfaction, thus making it easier to hire and retain workers whose professional goals are parallel to your company's goals.
Ruth Mayhew has been writing since the mid-1980s, and she has been an HR subject matter expert since 1995. Her work appears in "The Multi-Generational Workforce in the Health Care Industry," and she has been cited in numerous publications, including journals and textbooks that focus on human resources management practices. She holds a Master of Arts in sociology from the University of Missouri-Kansas City. Ruth resides in the nation's capital, Washington, D.C.