5 Policies to Keep in Mind When Starting a Small Business HR Department

As a small business grows and begins to add employees, it becomes critical for the business owner to establish a human resources department to maintain their employees.


Many business owners earn their degree with different mba specializations, but most will learn the basics of human resources. This is critical when the need arises to start an actual HR department in their business. When that time comes, it is important the business owner keep these five policies in mind:

1)  Company Policy Manual

In order for employees to be held accountable for breaking company policies, they have to be provided with the means to know what those policies are. The policy manual establishes facts about the company including equal opportunity employment, Americans with Disabilities procedures, harassment definitions, etc. These types of policies provide legal protection for the company from unnecessary lawsuits; inform the employees of the expectations in the workplace, line out disciplinary procedures, and save the company valuable time and hassles by proactively addressing problems.

2)  Recruitment and Hiring Policies

One of the most basic features of Human Resource departments is to hire new employees. When doing so, there ought to be a series of policies and procedures in place to govern how new employees are hired. In order to prevent discrimination lawsuits, it is important to have a standard operating procedure that cannot be challenged. Some recommendations for hiring procedures might include: internally advertising the open position, checking references, and conducting background checks.

3)  Termination Procedures

Unfortunately, the reality of the business world is that there come times when employees have to be terminated for different reasons. The procedures surrounding this process ought to be clearly outlined so that if and when an employee must be terminated there can be no reason for anyone to believe it was done wrongfully or out of discrimination.
In order to prevent wrongful termination exposure, the Human Resources department should have a series of policies in place that will allow them to answer questions like:

  • What policy was violated?
  • Was the employee aware of the policy?
  • Did the employee recently file a complaint against the company?

4)  Disciplinary Procedures

Before any employee can be terminated, there needs to be a series of disciplinary procedures in place. Some infractions are such that warnings, write-ups, and temporary suspensions aren’t enough. For everyone else, there must be an understanding between management, employees, and the HR department for how discipline within the company is going to be handled. Some of the important features of these procedures include documentation of the policy that was broken and an admission from the employee that they understand what was done improperly and that fair action was taken before the situation escalated.

5)  Safety Procedures

The most important asset of any business is its workforce. The company can invest hundreds of thousands in marketing, equipment, and facilities, but if there are no staff members to work for the company then nothing else matters much. For that reason alone it is important to consider what precautions the employees have to take and what dangers they face in their workplace. Most businesses will have to have a series of OSHA requirements, including Material Safety Data Sheets to protect their employees from being injured or hurt due to the chemicals they work with. Most companies will require their employees to sign off that they have received instructions concerning how workplace safety works in their company and agree to take reasonable precautions when dealing with potentially hazardous situations. Having these policies and procedures in place will also serve to protect the company from potential lawsuits resulting from accidents.

As the small business establishes its HR department for its growing workforce, there are myriad policies and concerns they will have to establish, but these five serve as a solid starting point.


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