There is no dearth of material out there urging you and guiding you on making your company policies. But hardly anyone speaks about the pitfalls you need to avoid while building them.
The importance of policies in a company cannot be stressed enough. Without it, things will be just chaotic and, well, chaos is not a ladder when it comes to company culture. Whether you are a newbie with 15 employees or a mature start-up with 500 people or a giant enterprise of 10000- you need company policies to not only navigate through the daily nitty-gritties but also to refer to when trying to take a call on unique incidents in the company.
The way you should make your policies will be governed by your industry, employee strength, growth stage, future plans, etc. but there are certain general errors that must be avoided while framing the policies. Now, these errors are made because they were not errors a till few decades back but now with the advent of millennials in the workforce, you might want to make policies that help you capitalize on the immense potential this new breed of employees bring. So avoid:
1. Esoteric Policies- Your workforce is not supposed to be conversant with the jargons of Human Resources. So you need to build policies that are easily understandable by them and make sense to them. Policies that make sense are easy to remember and follow. For example, one of the companies I spoke with recently had a very strange policy- they would accrue 1.75 days of casual leave every month if the employee has completed a minimum number of working hours in previous working month. Falling short by 10% will mean accrual of 1.25 days and so on. How do you expect the employees to understand and follow all this?
2. Over-the-top Stringent Policies- Now, policies have to be little stringent- after all they are meant to curb the chaos we spoke about earlier. But there is a limit to that. Companies will always have 5-10% of employees who find loopholes in the policies and try to take advantage of it. But sometimes HR managers in their pursuit of curbing these 5-10% of incidents, make the policy so stringent that the remaining ‘good lot’ feels suffocated. You don’t want to do that because more often than not people in this ‘good lot’ are also good performers. The same company, as in my previous example, had another rule. The managers were authorized to approve only 2 days of leave of their reportees in a month. For over 2 days of leave, employees would have to take an approval from the CEO of the company. This is obviously meant to discourage employees from taking long and frequent leaves. But in my opinion, this is not the way to curb the problem.
3. Inflexible Policies- The millennial worker wants and needs flexibility. Flexibility in working hours, locations, payroll, incentives, etc. The reason why this flexibility is important is rooted in the precise reason why you hire them in first place. The challenges that companies face today are far different from what they were in last century. Cut-throat competition and always changing consumer preferences with not-so-high switching costs demand innovative solutions and approach. For your employees to be this creative in a rapidly changing environment, they need enough room to be themselves. Hence, flexibility. Organizations these days are establishing a number of new rules to incorporate flexibility in their policies- flexi-hours, no attendance, flexi-pay, mandatory long vacations, esops, employee benefit plans and what not. The purpose of all this is to make an employee feel comfortable and creative enough to solve your puzzles.
Every generation of workforce comes with their set of potential and challenges. Millennials are probably the toughest kind yet because their potential is also completely unprecedented. Industrial revolution in last century brought forth a set of HR practices and policies that were relevant only till a few decades back. It is high time that you take a hard look your own policy structure and optimize it for this new generation of workforce. It is time for a renaissance in HR and it has to start with how employees feel policies treat them.