Workers' rights should be a central focus of development."
- Joseph Stiglitz
Why is employment policy important? When an employee enters into a contract with an employer, both parties must understand the other's expectations. When expectations are not outlined clearly, it can lead to conflict. This conflict can, in turn, lead to even more misunderstanding as neither the employer nor the employee knows how to go about it professionally, as no predetermined processes have been outlined. Such conflicts and disorganization can lead to chaos, termination, lawsuits, etc. Therefore, it is crucial that organizations set employment policies and make them clear to all employees. Read along to find out more about the types of employment policies.
Employment Policy Definition
To understand the function of employment policy, we must first look at its definition. However, before defining employment policy, let's explore its context. Human resources (HR) involves relaying HR practices for everyone within the organization.
When employees are informed of HR practices and the purpose they serve, they may feel more certain about their roles and rights within an organization. Additionally, it can lead to increased performance and motivation in the workplace when employees feel they are valued and being communicated with transparently.
Part of HR practices includes employment policy. It is one of the functions of human resources. Some employment policies are legally required for an organization to function. Other employment policies define codes of conduct or create safe and positive work environments for employees. Overall, we define employment policy as follows.
Employment policy includes all the processes, formalities, and programs set in place to create a positive work environment for employees.
Importance Employment Policy
Employment policy plays a crucial role in human resource management (HRM). Before diving deep into employment policy, let's briefly refresh our memory of an organization's human resource function. Human resource departments are in charge of a variety of essential business activities (see Fig. 1 below), including:
Recruitment,
Selection,
Training,
Development,
Feedback, and
Performance evaluation.
These procedures all have to do with the people behind an organization. However, it is essential to note that human resources also serve a leadership and management function.
For example, HR contributes to forming the organizational culture, fostering a positive work environment, creating motivation and rewards programs, implementing employment policies, handling conflict and dismissals, etc.
Therefore, human resources significantly impact the organization and its performance, in which employment policy plays a crucial role. Employment policy contributes to creating a positive work environment, including a positive work culture, good work conditions, setting out expectations for behavior and conduct, etc. Employment policy also ensures that organizations follow the laws and regulations related to the different types of employees. Thus, organizations need to outline employment policies not only for legal reasons but also to create favorable work environments.
Types of Employment Policies
Now that we understand the definition and importance of employment policies, let's look at their types. There are many different types of employment policies. It is up to the organization to decide which ones to implement (besides the ones they are legally obliged to implement). We describe some of the typical employment policy types below.
Equal Employment Policy
Equal employment policies are legally required in many countries, like the US. In other countries, though it may not be a legal requirement to have an equal employment policy, it is still illegal to discriminate against someone in the workplace due to their:
Age,
Race,
Disability,
Religion,
Sex,
Sexual orientation,
Parental status, and/or
Marital status.1
Beyond the fact that it is illegal and organizations may face lawsuits, fines, etc., when found guilty of discrimination, equal employment is also crucial as it helps an employer create a more favorable work environment. Employees trust that they were recruited and selected based on their skills and talents. They can rest assured that the organization will evaluate their performance at work rather than their personal characteristics.
Equal employment policy protects employees from facing direct and indirect discrimination at the workplace.
Termination Employment Policy
Termination employment policy may also be referred to as employee disciplinary action policy.
Disciplinary action is the process of confronting or punishing an employee for violating the terms of their contract and the organization's rules.
Every organization must specify a code of conduct or employee handbook that outlines the types of behavior that could lead to disciplinary action and termination.
For example, absenteeism, discrimination, poor performance, or misconduct can lead to disciplinary action whereby the company investigates the employee's work behavior. The organization might terminate the contract if the investigation concludes that the employee has engaged in unwanted behavior.
Therefore, organizations need to have a disciplinary action or termination employment policy so employees can understand exactly what would happen and what further steps the organization would take if they engage in unwanted behavior.
Check out our explanation of termination to learn more about disciplinary action and the consequences of unwanted behavior.
Absence Policy
It is also crucial for organizations to have an absence policy. Employers use contracts to legally inform employees of events like sickness, holidays, and other absences. In most cases, employees will be entitled to sick pay and several days of paid time off, benefiting the employee as they know exactly what the expectations are around this topic.
On the other hand, an absence policy also benefits the employer as it allows them to track employee absences. It also gives the employer the right to take action against an employee with poor attendance or frequent absenteeism. Finally, it ensures that the employee and employer are on the same page with absence management. It also helps the employer avoid discrimination claims, for instance, based on disability.2
Employment Policy: Compensation and Benefits
It is important to note that paid time off is sometimes included in an organization's compensation and benefits policy. This policy is made to entice employees to apply to work at the company (recruitment) and is also used for employee retention - offering employees attractive packages.
Compensation and benefits include the entire package offered to an employee, such as paid time off, salary, rewards, other benefits, etc.3
Employee Complaint Policy
An employee complaint policy is useful to have to allow employees to file grievances.
Grievances are formal complaints employees can file regarding their issues with a workplace.
Employees might file grievances for numerous reasons, including but not limited to the following:
Workplace conflict,
Health and safety concerns,
Bullying,
Harassment,
Payroll problems,
Physical workplace problems, etc.
As a result, a formal grievance procedure is vital so employees can be formally heard by their employers. It also ensures that there is a conflict or grievance resolution process in place to deal with employee complaints through which employees can voice their complaints professionally.3
Temporary Employment Policy
Finally, let's take a look at temporary employment policy. Most countries have varying policies and procedures regarding hiring temporary workers.
Sometimes an employer might want to hire a temporary or seasonal worker. Temporary employees will usually work part-time on fixed-term or zero-hour contracts.
The organization might use a zero-hour contract when unsure how many hours will be available for the employee.
Either way, the temporary employee's contract should state the following:
- When the contract begins and ends,
- The contract's notice clause,
- Payment details,
- Holiday and sick pay entitlement,
- Other benefits the employee is entitled to, etc.4
In addition to temporary employment policies, nowadays, it is also crucial for companies to have a remote work policy. Although many companies have reopened their offices post-pandemic, a large percentage of organizations have adopted a hybrid working model. Other organizations have fully remote workforces. Therefore, all hybrid and remote organizations need to develop a remote working policy to establish and ensure the rights of both the employer and the employee.5
Employment Policy Examples
Before you head off, let's take a look at some employment policy examples. Now that you understand the general employment policies, you might wonder how to create or implement them. Let's first explore a standard process of implementing HR policies.
The general process for creating HR policies, including employment policies, is as follows:
- Create an HR department and outline HR roles,
- Establish employee needs and responsibilities to find out which types of policies are a must,
- Check local laws and regulations to make sure your HR policies comply with them, and
- Ensure all employees are familiar with the policy.
Make sure that all employment policies state the details and purpose of the policy and the consequences of dismissing or going against the policy. Additionally, the organization must ensure that all employees are familiar with and understand the policy.
Employment Policy - Key takeaways
- Employment policy includes all the processes, formalities, and programs set in place to create a positive work environment for employees.
- Employment policy contributes to creating a positive work environment, including a positive work culture, good work conditions, setting out expectations for behavior and conduct, etc.
- Employment policy also ensures that organizations follow the laws and regulations related to the different types of employees.
- Equal employment policy protects employees from facing direct and indirect discrimination at the workplace.
- Disciplinary action is the process of confronting or punishing an employee for violating the terms of their contract and the organization's rules.
- Grievances are formal complaints employees can file regarding their issues with a workplace.
References
- HR Team. Equal Opportunities Policy Guide. Davidson Morris. 2021. https://www.davidsonmorris.com/equal-opportunities-policy/#:~:text=Equal%20opportunities%20laws%20in%20the,or%20more%20nine%20protected%20characteristics.
- SA Law. TOP 5 EMPLOYMENT POLICIES THAT EVERY EMPLOYER SHOULD HAVE. 2022. https://salaw.com/views-insights/keely-rushmore-emp-top-5-employment-policies-that-every-employer-should-have/
- Indeed. Company Policies: 17 Policies to Consider for Your Business. 2022. https://www.indeed.com/hire/c/info/company-policies#6
- fsb. How to hire temporary employees and seasonal staff. 2022. https://www.fsb.org.uk/resources-page/how-to-hire-temporary-employees-and-seasonal-staff.html#:~:text=This%20is%20a%20type%20of,amount%20of%20work%20is%20unpredictable.
- Indeed. How to Create a Remote Work Policy (With Template). 2022. https://www.indeed.com/hire/c/info/how-to-create-a-remote-work-policy-with-template?hl=en
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