Significance of HR Policy for an organization

Significance of HR Policy for an organization
Significance of HR Policy for an organization

Significance of HR Policy for an organization

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A machine with a defective or missing part will not function as well as it should, and may break down entirely. Similarly, an organisation with a defective or missing element will not work well. The strategic significance of any element of an organisation becomes clear when that element is missing or broken. This could be true of a structural element, such as a department or team, or a more abstract, functional element, such as a policy or procedure.

o Synthesising general lessons about the strategic significance of HR policy for an organisation, as illustrated by examples of how a business can be impacted when policy fails


Significance of HR Policy for an organization

As in the case of a machine which breaks down when one of its parts is not functioning effectively or when it is missing, an organization’s performance is threatened when one of its departments is dysfunctional or neglected. The need for HR involvement in strategy is inevitable and companies that do not involve the HR in policy are bound to experience difficulties in achieving their objectives. This paper explains the importance of an HR policy and how its failure may impact an organization’s performance in a significant manner.

HR has been hailed as one of the most influential department within the organization. This is because it manages employees who are considered the organization’s most important asset. According to Watson (2005), HR policy provides guidelines governing employees, including how they should behave and execute their roles to meet organizational objectives.  HR policy guides performance through providing guidelines on employee roles and responsibilities, scope of performance and terms of contract or employment (Storey, 2007). In its absence, the organization may not be in a position to follow up employee performance. This creates a gap in employee accountability and could therefore result in low productivity.

HR policy ensures consistency within the organization and as established by Armstrong (2014), HR policy is key in ensuring that employees deliver consistent results. Through providing performance aspects, HR policy ensures that employees work towards meeting their targets. An example is performance appraisal included in the HR policy, which ensures that employees maintain consistent performance to ensure that they are rated highly. When the HR strategy is aligned with the overall company strategy results are likely to be more consistent and effective in enhancing organizational success (Watson, 2005).

HR policy provides a workplace structure; providing guidelines regarding working hours and leave, performance expectations, disciplinary action, work environment, workplace safety and communication channels among others (Bamberger, Biron & Meshoulam, 2014). Lack of a structure would be chaotic for the organization, leading to performance issues. According to Bamberger, Biron and Meshoulam (2014), policy sets clear guidelines that can be followed to enhance organizational processes by ensuring orderliness. This way, the organization is likely to run smoothly, as opposed to where there is no HR policy, thus enhancing efficiency.

HR policy in most organizations ensures that most regulations related to employee rights are adhered to. The HR policy in most cases contains information such as equal employment clauses, employee relations and membership in trade unions, health and safety and termination guidelines (CIPD, 2014). These are important in ensuring that employee rights are protected and that the organization is compliant with the law. It also means that employees are aware of the organization’s position based on various issues that affect job security, such that the organization can attract and maintain the right talent. Lack of a HR policy presents great risks in terms of meeting legal obligations and could subsequently influence performance (Storey, 2007).

In conclusion, it is clear that HR policy is a major prerequisite for organizational success; given that it provides guidance, order and structure, which are necessary in running the organization. All other departments depend on HR to ensure that employees can provide optimal service through guidance from the HR policy. The lack of a HR policy within the organization therefore resembles a machine which with a missing component, such that the organization is likely to fail. Similarly, a HR policy that is not working effectively could impact organizational performance in a significant manner.

Reference List

Armstrong, M. (2014) Armstrong’s Handbook of Human Resource Management Practice. 13th ed. London: Kogan Page

Bamberger, P., Biron, M. & Meshoulam, I. (2014) Human resource strategy: formulation,  implementation and impact, 2nd ed. London: Routledge.

CIPD (2014) HR policies factsheet [Online]. Retrieved from

Storey, J. (2007) Human resource management: a critical text, 3rd Ed, London, Thomson Learning.

Watson, T. (2005) ‘Organizations, strategies and human resourcing’. 

In: Leopold, J., Harris, L. & Watson, T. (eds.).  The strategic managing of human resources. Harlow: Prentice Hall.

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