The Importance of HR Policies for Your Business

Human resources handles a variety of tasks, all related to employee relations. From the recruitment and hiring process to employee disputes, your HR department is a vital part of your business. While the tasks of an HR department vary depending on the company, HR policies are necessary to ensure that employees are following the rules while streamlining the day-to-day operations.

Without the right policies in place, employees won’t know what a company’s culture is and what is expected of them. Policies can prevent a chaotic workplace while keeping your business running smoothly.

In this article, we’ll discuss different HR policies and why they’re important.

Recruitment and Employment

Posting job ads and hiring employees is just one core function of an HR department. Policies for recruitment and employment can help your HR professionals when it comes to their selection process and informing potential employees of a company’s procedures and expectations. The policies can determine what types of candidates will require an identity check for their positions and which ones will not. This can be useful if a current employee wants to refer an applicant to the company.

Promotions and Rehires

Human resource policies that explain the company’s stance on promotions and rehiring can help your employees understand what they need to do to get a promotion. It also includes grounds for rehiring an employee who has been terminated. Employees who leave the company in good standing might be eligible for rehire, while those who continue to stay and perform above expectations receive promotions. While your HR team might need to check with a manager to ensure that a promotion is warranted, your policies let your employees know what they need to do to be considered.


Your HR department will determine fair compensation for each available position at the company by analyzing the current market. While your goal may be to save money on hiring, an HR professional can tell you the pros and cons of offering below what your competition is offering.

Employee Evaluations

Like compensation, the HR department establishes policies to address how employees will be evaluated. They may decide that it’s best to evaluate new employees after 90 days to determine if they’re a good fit for the company, and if they are, offer them a raise for sticking around.

Training and Development

HR policies can include details for the training and professional development of employees so that your employees know what resources are available if they want to continue to build their skill sets for improved upward mobility in your company.

Employee Disputes and Issues

HR policies tell your employees how problems at work will be handled. From issues with their coworkers to management and the workload itself, employees need to know that they are available to share concerns with someone in private without it getting back to upper management. The policy should outline the proper chain of command for handling these situations, including whether an employee should go to the supervisor first or right to HR.


HR policy manuals will outline your company’s internal policies and code of ethics. This can include things like professionalism, dress code, vacation time, sick and personal days, holidays, discrimination, and more.

For example, if your company operates out of an office and your employees are likely to interact with customers and clients, you may require them to dress more professionally than employees that work in retail.

When it comes to sick days, personal days, and vacation time, you’ll need to ensure that you’re following the law. If employee retention and happiness are important to you, you should aim to go beyond the time off policies required by law so that your employees don’t feel pressured to come into work sick just because they already used their paid time off.

Because ethics are an important part of your business that varies from person to person, you’ll need to outline how your company feels about certain topics. You can outline what constitutes good behavior to let employees know what’s expected of them.

In the handbook, you can also list actions that are not allowed, such as cussing on the job and recording conversations with coworkers and managers.

By giving your employees a handbook to read and sign, they will acknowledge the rules. If there is ever a problem with them not following the rules, you can address it with them in private and go over the documents that they’ve signed. If they continue to disobey the handbook, it can be grounds for termination.

Labor Laws

Human resources policies should include posting the current labor laws so that employees understand what they are and how they apply. These laws include policies dealing with minimum wage, overtime, employee benefits, and breaks to remind your employees what they’re entitled to so that they can speak up if they believe these rights have been violated.


If your employees don’t know what activities and actions are grounds for termination, you can’t expect them to follow your rules. They need to know that there are serious consequences for not following the rules of your business. HR policies state the situations in which an employee can be fired. The policies explain the grounds for termination to protect the company in case an employee tries to seek legal action.

When an employee has clearly violated the policies outlined in the handbook, they can be terminated. Your HR policies should also address how terminations work. For example, when someone is let go or fired, you need to tell employees where they go to sign any paperwork to acknowledge that they’ve been fired and the reason behind it. Without this, your employees could walk out without ever acknowledging the cause for termination and come back seeking legal action, questioning the reasons behind their termination.


Your HR department provides vital services not only to your business but to your employees. If you want to build a healthy workplace, you’ll need to rely heavily on your HR department to let you know that you’re following the law and allow them to come up with ideas to promote a better work environment.