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What exactly is HR? Part 2

You will recall in Part 1 of “What exactly is HR?” that I looked at the differences between “HR” and “Personnel” .

To sum up, HR sets the parameters for how people should be managed by using legislation and accepted good practice as a framework to set the policies and procedures that govern the management of a workforce.

The actual day-to-day and on-going management of the workforce, on the other hand, is undertaken by a combination of Line Managers and a Personnel Department.

My view is a very simplistic one (I’m a very simplistic person) and of course is not necessarily mirrored in every organisation. Some larger companies have a Personnel Department whose role includes the formation of policy and procedure; likewise, I have come across many HR Departments who actually manage the workforce.

Over the past two and a half years since setting up Turnstone I have worked for many different organisations – from those with a few as three employees up to PLCs with over a thousand staff. Whether HR or Personnel, the larger companies tend to have their own in-house function.

Generally speaking, however, the smaller companies do not have their own HR/Personnel function, although there is often a misconception at this level over what HR actually is.

Within the smaller companies, probably the most common comment that my Turnstone colleagues and I receive is: “We do our own HR in-house”. Exploring that statement further, we generally find that by HR, these businesses mean monitoring of sickness and holidays and the preparation of data for payroll.

In reality, HR is much more than this. It encompasses all aspects of people management from recruitment, through dealing with grievances or disciplinary issues, performance appraisal and training to redundancy and dismissal – and everything people-related in between.

Clearly the day-to-day management of the staff in these companies is done by the business owners or by line managers but we have generally found that HR (in my strict definition) is not done very well, if at all. So many companies are presently operating without adequate policies and procedures. By adequate, I mean policies and procedures that follow, as a minimum, ACAS guidelines, or that are up to date in respect of the latest employment legislation.

I am still surprised, too, by the number of companies that are operating without Contracts of Employment in place or, with Contracts that date back ten or, in some cases, as we have found, over twenty years.

The problem for those businesses is one of exposure. Clearly, if procedures are not in place, these will not (or simply can not) be followed in the event of an issue. The risk of being taken to an Employment Tribunal is high – as is the risk of losing at the Tribunal!

To reduce this risk, the first stage is to ensure that all employees have an appropriate Contract of Employment and that up-to-date and robust policies and procedures are in place. This is good HR practice.

Having said this, it doesn’t matter how good an organisation’s policies and procedures are if they simply are not followed. You can have the most valid reason to dismiss an employee but if the correct process is not followed, once again, you open yourself to a high risk of a successful Employment Tribunal claim by an employee.

This is where good Personnel Management practice comes in to play, in my book. How you manage your staff is vital to the success of your business. This includes not only the more aesthetic – or soft – management techniques but also adopting good practice – the latter being governed by following your policies and procedures.

It is an employee’s right to make a claim to an Employment Tribunal regardless of the circumstances (although the Government is presently discussing ways to reduce the number of frivolous claims). The key to minimising this risk is to ensure that the correct procedures are both in place and have been followed.

In other words, whatever your own definitions might be, always adopt good HR and Personnel practice!

“There is evidence to suggest that good HR practice and people management in SMEs are key factors in strong business performance and can lead to increased productivity.”

- CIPD people Skills Project 2017


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