Let's say that you have been hired or requested to establish an HR function. What
do you need to do?
The first step is to determine what the expectations are of the manager who
realized the necessity of the function. In very small companies, this is often
the owner or most senior manager who just returned from a seminar or workshop
where an attorney -- or a whole flock of attorneys -- has scared the hell out
of him or her by pointing out the complexities of complying with federal and state
labor codes. Using some of the responsibilities listed below, develop a job description
with that manager which at least outlines what the job entails.
After that, determine the compliance issues which pertain to your company.
The most basic of these have to do with wages and hours of work, classification
of employees, the I-9, COBRA (now down to two employees in California and New
Jersey, by the way), leaves of absence including maternity and family leaves which
differ from state to state, ADA, harassment, and a host of others.
Then, determine whether or not you need to have an employee handbook or other
formal policies and procedures manual to cover everything from establishing the
company as an at-will employer to benefits. If a handbook already exists, be certain
that it is in compliance and that there are no implied contracts involved (e.g,
be certain that the first 90 days of employment is termed the "Introductory
Period" rather than "Probationary Period" and that there is a statement
that, "Completion of the Introductory Period does not constitute an express
or implied contract for continued employment).
Are all the basic policies included? These can be thought of as grouped into
benefits, discipline, and conditions of employment. Is there a balance between
stated corporate and employee rights and obligations?
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Take a look at existing employee files or, if no files exist, gathering all
the papers into coherent personnel files. Minimally, you should have an Application
for Employment form or resume, a W-2, any insurance forms that the employee may
have signed, and performance appraisals. I also like to see start dates, dates
of reviews, dates of promotions, and all the changes in wages or salary. An excellent
employee file jacket is sold by Amsterdam Press in New York: if one is diligent,
the entire employment history of an individual can be kept on the inside of the
jacket and other pertinent information on the outside. Because personnel still
runs on paper and paperwork, do not rely heavily on computerized files.
Who takes care of payroll? There used to be an ongoing fight between HR and
accounting as to who gets payroll. I have no idea why anyone would want it and
it does belong in accounting more so than in HR but, should the question arise,
the answer today is to outsource payroll to a payroll service (or a bank which
offers such a service). There are still responsibilities such as informing the
payroll service of changes in individual wages or salaries, docking, and final
pay, but payroll services are definitely the way to go. They do vary in quality
and quantity of services, so you will have to compare. Do not let a payroll service
sell you more than what you need...which means that you'll have to do some research
into what you need.
Benefits administration is and should be separate from payroll. Even if you
have the best broker in the world (who you only have to monitor on a semiannual
basis), there is always internal administration of such packages. Further, you
will have the responsibility of being the source for answering questions about
all forms and types of insurance, the differences in options, and the cost to
employees. One of the ways that HR can contribute to the company is by keeping
the costs of benefits down, and this means auditing the policies periodically
to be certain that there haven't been increases in premiums either directly or
indirectly through a decrease in benefits.
should be responsible for new employee orientation. In order to inform new employees
of their benefits and the policies of the company, you will very simply have to
be the expert in benefits and policies of the company.
Does the company have a compensation system or is it pretty much a hit-or-miss
proposition? Are there job descriptions? Job specifications? Is compensation tied
to responsibilities? Are increases in pay tied to contributions to the company,
i.e., pay-for-performance? Do you need a graded compensation system? Contrary
to popular opinion, I am not certain that a compensation analyst from outside
the company is needed to set up a system in a company with fewer than 50 employees.
I know that one is not necessary for companies with fewer than 20 employees.
What you will have to do is become proficient in writing or formalizing job
HR has an information function that you should think through. Changes in policies,
changes in benefits, even changes in laws must be communicated to all employees.
Major changes may call for training such as in harassment a few years back. Major
changes in medical insurance benefits (as opposed to unemployment or SDI -- for
those in states with SDI) have to be disseminated to all affected employees. Therefore,
HR becomes a kind of pass-through in the information cycle.
I've left recruiting for last because it can be, but is not always a major
function in smaller companies. Some small companies are very stable, hiring perhaps
as few as one new employee in a 12-month period. Others are in very competitive
industries where recruiting can be a function unto itself. Interviewing, selection,
and placement are part and parcel of recruiting and a knowledge of the techniques
involved is very important. Hiring the wrong person(s) is extremely expensive.
Therefore, if recruiting is a major function, it may be in the
company's best interest to have a professional recruiter and another employee
to handle all the other functions. (The recruiter must also have a knowledge of
benefits and policies and procedures, but his or her primary function would be
to find and hire the best person at the "best" salary, i.e., one that
satisfies the applicant and is affordable to the company.)
Certainly there are other responsibilities, but they should be considered as
secondary. Delegating the Christmas party and company picnic to someone else should
be your first priority. Don't get caught up in becoming the company's "cruise
director." You've got better things to do.
First appeared at INTEK World
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