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HRM Policies

 A policy is a predetermined course of action

established to guide the performance of work
towards accepted objectives.
 “Human resource policies constitute guides to
actions. They provide the general standards or
basis on which decisions are reached.”

Characteristics of Human
Resource Policies
1) HR policies are based on, or derived from the
human resource objectives of the organisation.
2) HR policies are general statements which are guides
to decision making.
3) They reflect the intentions of top management with
regard to the human resources of the organisation.
4) HR policies are standing plans which can be used
again and again as standing answers to problems of
a recurring nature.
5) Responsibility of formulating HR policies lies with
the HR department and the top management. 21
Need and Importance of HR policies
 Helps in prompt decision making.
 Uniformity and consistency of administration.
 Sense of security.
 Facilitates delegation of authority.
 Guide for orientation and training.
 Promotes morale and loyalty.
 Facilitates better control.

Scope of HR policies
1) Employment: All policies concerning recruitment,
selection and separation of employees are included
in this function. These include guidelines on the
following points:
a) Minimum hiring qualifications
b) Preferred sources of recruitment.
c) Reservation of seats.
d) Employment of local people.
e) Reliance and weightage to various selection devices.
f) Basis to be followed in discharging an employee.
g) Probation period.

2) Training and Development
a) Attitude towards training – reactive or
b) Opportunities for career development.
c) Preferred methods of training.
d) Programmes of executive development
e) Orientation of new employees.

3) Transfers and Promotions
a) Rationale of transfer.
b) Periodicity of transfer.
c) Promotion from within or outside the
d) Relative weightage to seniority and merit in

4) Compensation
a) Job evaluation system.
b) Minimum wages and salaries.
c) Method of wage payment.
d) Profit sharing and incentive plans.
e) Non-monetary rewards.
f) Executive stock option plan.
g) Whether to pay prevailing or more than
prevailing salary scales.

5) Working Conditions
a) Working hours.
b) Number and duration of rest intervals.
c) Overtime work.
d) Safety rules and regulations.
e) Leave rules.

6) Employee services and welfare
 types of services i.e., housing, transportation,
medical facilities, education of children,
group insurance, credit facilities etc.
7) Industrial Relations.
a) Handling of grievances.
b) Relationship with trade union.
c) Suggestion schemes.
d) Discipline and conduct rules.
e) Workers’ participation in management.