Assignment 2 - Report on HR Policies

8/8/2019 Assignment 2 - Report on HR Policies

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1. Introduction and backgroundWith the fact that Arhant Solutions has more than 100 employees working together to provide

the best service in Software industry, we can state that Arhant is an emerging company. But,along with the success story comes the complex situation of managing behaviors of this growing

workforce. Management, at the strategic level, is always facing challenges to maintain ethicalbehaviors of its employees and eventually to develop a strong culture within the organization, the

objective of which can be to sustain a positive perception of customers towards the company, to promote a conflict free working environment, to gain efficiency in overall operations, or a

combination of these. Till date the management of Arhant Solutions has tried to achieve theseobjectives through formal organizational culture and chain of command, without any set of

written down guidelines and policies for employee behaviors and actions.

Arhant Solutions expects to further increase the volume of its services and thus increase its workforce. Hence, to cope up with the growing complexity brought in by increased number of

employees, the company wants to decide whether it should have a formal Ethical and BehavioralGuidelines. The purpose of this report is to help management establish a viewpoint regarding the

necessity of such policies, and to provide recommendations and suggestions on the issue.

2. ScopeEmployee ethics and behavior policy is a broad realm because all human activities that are

carried out in an organizational setting fall under this topic. We have tried to incorporate much ofthese behavioral and ethical issues. Many organization specific data, litigation cases, as well as

probable scenarios related to Human Resource Management (HRM) are included in this report.However, some aspects of HRM such as Employee Benefits, Wage and Salary, are not the focus

of this report.

3. Formal Policy Guidelines: Do we really need them?Arhant Solutions is a new business enterprise and does not employ a written set of behavioralguidelines but relies upon a culture based system to influence actions of its employees. The

management team believed, since Arhant is a small organization, a strong organizational culturecan guide the employee conduct and actions. But the company is facing much adverse situations

due to the lack of any formal codes of conduct for employees.

First, we are getting an increased number of negative feedback from our clients. The percentage

of negative feedback we get is increasing for each of the past three years of operation (Appendix1). This clearly depicts that our employees are not performing as they should be, the fundamental

reason of which can be the absence of a set of guidelines to lead them. Previously such guidancewas available through supervisors and was effective to some extent. But, now, since the number

of employees is increasing in each department (Appendix 2), direction through the chain ofcommand is not proving to be sufficient to promote the performance as required.

Second, there exists much variance in the manner of employee conduct among different

departments. Due to lack of a single set of guidelines, each department has different view on thedegree of punctuality, process of Paid Leave and Overtime, Reporting mechanism, process of

selection and hiring, performance appraisal method, use of office resources, complaint and


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grievance handling and many other behavioral issues. Such differences have created inconsistent performance and difficulty for the management team. HR team is finding it hard to prepare a

promotion plan because it cannot correctly quantify the performance level (of employees indifferent departments) on the same basic platform. Accounts team are facing the problem of

deciding whether an application for Paid Leave/Overtime submitted before 3 days should be

acceptable or application submitted before 1 day should be accepted. Web Design departmenttakes the former number of days as its norm, while in Design department the later one is inpractice. Clearly, the differences in norms and practices in different departments and divisions of

a company can lead to inconsistent activities and thus result in poor performance.

Third, Arhant had to face 2 litigation cases due to unwanted employee behavior. In one of the

cases, an employee demanded for a provident fund after leaving the organization with 1 monthprior notice, while 2 month notice is the norm in Arhant. Another case is related to proper use of

company resources and ethical behavior required of employees (Appendix 3). Arhant lost in bothlitigation cases since there wasnt a proper written down rules of conduct that employees should

follow.

With all of these three adverse situations, the common problem is the absence of formal ethicaland behavioral guidelines for employees. Along with these issues, another important aspect to

focus in determining its necessity is the Increased Diversity of our employees. Like that ofalmost all organizations, our workforce is composed of people from various race, religion,

gender, age group and education level. On top of that, each individual has a unique set of valuesand perception which adds to this level of diversity. Diversified workforce results in differences

in perception to work ethics, level of flexibility required (an important example would be paidleave allowed to female employees for pregnancy would be different for paid leave allowed to

male employees for the same), acceptable behaviors and others. Hence, to attain a consistent setof values which is applicable to the whole diversified group, and thus reduce complexity in

managing this diversity, an umbrella policy is need of the hour.

In the list given below we have included some important reasons, along with the reasons we haveinferred from the adverse scenarios, that helps to justify the need of formal Ethical and

Behavioral Guidelines Policy for employees.

To define expectations:

It is better to inform employees what is expected of them and have a structured, managed

workplace environment than to let the employees decide for themselves the expectations and endup having a chaotic workplace. The policy is required to define expectations such as the time to

arrive at work, acceptable dress code, report mechanism, harassment issues, grievance handlingand others. Defining expectations helps to have uniformity in schedule and behavioral conduct,

and also works as a verifying standard when employees do not adhere to expectations.

To have consistent behavior in all departments:

Having a single guideline policy that determines all expected human activities in theorganization contributes to consistent behaviors across all departments. Such consistency in

employee behaviors and rules that they should follow reduces much of the managementcomplexity. As in our case, HR Manager would have ease in designing Promotion plan for


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employees of all departments based on same appraisal method and Accounts person would haveno problem in determining acceptable paid leave application, if there were formal policy

guidelines.

To achieve high performance:

Behavioral guidelines communicate preferred activities and set of behaviors that employeesshould follow. Everyone is aware of what is expected of them and each perform their respectivetasks and contribute as a team. If properly motivated, synergy of inputs would greatly enhance

the performance of the organization as a whole.

To avoid litigations and have a basis for proof against them:

Formal policy is always prepared consistent to the existing legal environment (see section

Recommendation). Therefore, there is much less chances that any litigation cases might occuragainst the companies. In addition to this, if any litigation case might incur (Appendix 3), the

formal policy and guidelines acts as a proof/evidence and thus greatly reduce the cost of lawsuits.

To enhance customer perception towards the company:

As we have discussed before, having a set of rules to guide employee conduct will enhance

performance and productivity. And with this high performance, customers tend to be moresatisfied. We can decrease the level of negative feedback from our clients and eventually gain

more market share. In addition to this strategic advantage, public relations can be promoted ifour policies and actions are aligned with ethical values perceived highly by public.

To create an equity-based environment:

Employee diversity is increasing in Arhant and so is the diversity of perceived ethics, norms and

values. If not properly managed, differences among employees can result in conflicts,unfavorable working environment, high employee turnover and thus poor performance.However, if diversity is incorporated in behavioral policy and a uniform set of guidelines is

implemented disparity in the ways employees are treated is reduced and creates a conflict freeworking environment.

However, it should not be understood that a set of rules to guide employee behavior is an end-all

be-all solution to managerial problems. There are certain drawbacks to this approach and can backfire if implemented without any proper analysis and planning. Some of the common

drawbacks are listed below.

Difficult to make the set of guidelines exhaustive:

It is almost impossible to include every employee behavior related guidelines in a formal policy.

So it is a management dilemma to decide what issues are important and should be included.


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Self conflicting rules:

Since the policy includes a large number of behavioral rules and guidelines, there are chances

that one guideline may conflict with another. And along with this issue comes the dilemma todecide which guideline should over rule the other.

Tendency to find loopholes:

Employees tend to find loopholes and try to manipulate it when activities and behaviors are

based on a set of guidelines. This practice might create unfavorable working environment andfrustrations for other employees who are sincere.

Difficult to incorporate diverse values:

Although it is required that policy should amalgamate values from the diverse workforce topromote fairness and equality, it would not be possible to incorporate each and every differing

values and norms. It is difficult for the policy makers to formulate one single set of rules thatsatisfies all diverse groups.

Challenging to communicate and implement:

Even when policies are formulated, it is a challenging issue for management to communicate thepolicies to employees. Most of the time policies are prepared with great effort but their creators

fail to pass on the information to employees and the desired objective is not met.

Despite many drawbacks of formal policies we advice Arhant Solutions should create a set offormal Ethical and Behavioral Guidelines policy. Yes, there are difficulties in the process of its

formulation but the advantage of having such policy outweighs the difficulty faced. In theRecommendations section, we have defined some probable set of activities that management

could carry out in order to devise formal policy that is effective and well received by all

employees.

4. Recommendationsa. Look out for any related federal or state lawWhile developing behavioral policies and guidelines, the creator team should take into accountany federal or state law governing the ethics and behaviors in the workplace. It is recommended

that the management should consult with any law firm or individual attorney experienced in therelated field. In addition to that, any changes in the law should be timely incorporated in the

policy.

b. Support from top management is requiredTop management (in our case, the Managing Director) should actively support the process ofpolicy development and should lead by example in implementing the policies developed. If not

supported, employees would not tend to follow the policy and hence it will lose its value andmay not serve its intended purpose. Hence, we recommend that the MD should form a Policy


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Management Committee and actively participate in the development, communication andimplementation of behavioral policy.

c. Rule based vs. Principle based approachAs we have discussed in the previous section, policies and guidelines cannot be exhaustive and

cover all expects of human behavior in the organization. So to offset this challenge, policiesshould be a mixture of Rule based policy and Principle based policy. Behaviors or activities thatneed to be specific (described step by step, or requires specific number, time or place) should be

considered for Rule based approach. On the other hand, Principle based approach should includethose areas of behaviors that can be guided through a set of principles and do not require

specificity in activities. However, ambiguous words and statements should be avoided. Decidinga balance between Rules based and Principle based can come as a challenge for the policy

makers.

d. Include the concerned level of employeesTo get a complete and accurate list of acceptable behaviors, the concerned employee and his

supervisors would be the best person to consult with. In addition to the accurate behavioralguidelines we get, including the concerned employees helps in creating a sense of ownership and

responsibility among these employees and thus makes policies more effective.

e. Take diversity under considerationWhile making decisions for policies, we should consider the diverse interests that exist in ourorganization. Having a representative from each group helps to gain perspective of employees

with varying norms and values, which in turn leads to a set of policies that is widely applicable,serves fairness and equity, and thus is more effective.

f.

Communication and training is the key

Employees need to know that our organization has a set of formal rules and policy guidelines.Without proper communication and training, policies are nothing but a written paper with no

value. Once the formal policy is drafted, it should be communicated to the employees in the formof Employee Handbook, Postings, E-mails, meeting and training sessions. There is even a US

federal law that requires employers to post notices of certain rights of the employees. Theobjective is to let the employee know what are standard acceptable behaviors and ethics of the

company. Plus, it is strongly recommended that employees are made to sign Acknowledgementof Receipt of Policy Manual. This works as an evidence in case some litigation arise in the

future that employee was fully aware of the desired ethical behaviors.

To conclude, as a growing enterprise, Arhant Solutions is facing various new challenges and oneof them is to manage ethics and behaviors of diversified workforce. Formal policy would reduce

the occurrence of behavioral and ethical problem. It is always better to incur the cost ofdeveloping and implementing a policy than to bear the cost of litigation and other problems that

occur in its absence. We strongly recommend the company should have a set of formal policiesthat represents interests of the diversified employee group, consists unambiguous rules for

behavior and is properly communicated to all employees.

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Assignment 2 - Report on HR Policies