4 tips for creating bulletproof HR policies

Reader Question - Compensation InsiderClients regularly ask me : “How do I create a policy ?”.

Many times, they start by brainstorming about the topic of the policy, listing all possible twists and turns, and diving right into what the policy “should” be. Very rapidly, they feel overwhelmed and confused, not knowing how to organise their thoughts to make sure that they cover everything.

My advice is very simple : take a deep breath, and a mental step back.

The first thing you need to figure out

Your first question should be : what is the purpose of this policy ? Here are a number of scenarios :

1 – You are introducing something new.

For example, you are working with the Learning and Development team on the introduction of an Education allowance for employees as pert of their annual development plan. Why are you introducing it ? This will be the purpose / introduction of the policy document. Who will be eligible ? To what ? Under which circumstances ?

2 – You already have a policy in place, but want to change it.

What is the reason of the change, and expected new outcome ? Do you need to change everything, or just some elements of your policy in order to achieve the new goal ? The less change you introduce, the easier it will be for the organisation to adapt to the new policy. Focus a lot on how you will communicate to employees, and try, as much as possible, to manage their perception, especially if they can perceive this change as lowering of their “entitlements”.

For example in your Education allowance, you may want to increase cost control. You have 2 equally efficient options : you can limit the amount of education sponsorship paid to each employee. Or you can keep the current amounts, but introduce a limit on the number of employees who will be eligible.

How do you decide ? Look at your statistics to analyse how widespread the actual usage of the policy is, and how many people would be actually impacted by either solution. Depending on your company culture, maybe you could even get feedback from a group or two of employees. Eventually, if both options are equal in view of your cost control target, implement the one that will be perceived in a better light by your employees.

3 – A new situation arose that no-one had anticipated.

You’ve  been tasked to figure it out. Or there already is a policy, but this case was not included.

First evaluate the probable frequency of the situation. Assess the risk attached to it, from the company standpoint. Based on those two elements, decide if really need to create a policy, which has to be communicated to employees, or if you’d rather have an internal process within HR to manage those cases if and when they arise in the future.

If you do decide for the second option, it’s best to document it so that you have a reference point for the next time you’ll be face with a similar case. Remember to include the reason why you’re treating the case the way you do, so that in future times, you have a guiding principle for decision-making. This will greatly reduce your time involvement in the future, and will also support consistency of treatment and therefore equity within the organisation.

In all cases, don’t forget the 80/20 rule

80% or more of the situations have to be covered by the policy. In HR, based on my experience, in reality, 90% or more of employees will be covered with the general rules you set up.

For the remaining 20% or less, create an exceptions process. I recommend to document or keep track of all exceptions, and especially, why that decision was made / the reasoning behind the decision. In time, you may discover there is a trend in the exceptions, and fall back on case number 2 where you amend your policy.

Depending on your company culture you can make the exceptions process more or less visible.

A visible one means that you create a formal process of request for an exception, which is communicated to employees and managers. This approach based on transparency has a direct, positive impact on employee engagement and their trust in the organisation. However you have to be ready to risk getting more requests, because you have opened the door, officially, for potential exceptions. If you will turn down avast amount of these requests, then employees will know about it and the positive effect of transparency will be lost because of the perceived “close-mindedness” of the company.

Conversely, if your exceptions process is not communicated at all, you will most probably reduce the number of possible requests, because employees won’t think to ask. However your organisation is at risk of being perceived as more rigid. And if some exceptions are approved indeed, they will most likely be regarded as a proof of inequity in the organisation – no matter how consistent you handle the exceptions.

Finally, never bypass the “how” or process in your policy design.

This is the procedure that accompanies the policy. Cover the process from all angles : from the employee side, the manager side, the HR side, and, very often, the IT (for systems support) and/or Finance (if there are costs) side as well. Make sure the process is supported by documents and tools as requested, or else you will end up working more on the dialy implementation of your policy, than you were before the change.

In short, whenever you “have” to work on a policy :

  • identify the real objective and assess if there is a need for a full policy, an amendment, or simply an internal working guideline for HR.
  • remember the 80/20 rule and try to cover the majority of cases
  • implement a process for apprehending exceptions
  • ensure your procedures and supporting tools and documents are as tight as possible.


Interested in this topic ? My retainer service gives you access to me for 5 or 10 hours on-demand, addressing any kind of Total Rewards issue you’re facing. Flexible, convenient and hands-on : this is the ultimate solution for the busy HR professional who doesn’t need a consultant for a full day (and the related cost) but is looking for expert feedback with a quick turnaround. Contact me and you’ll soon have your private advisor for all matters C&B and HR career !

Print Friendly, PDF & Email

Speak Your Mind