Most small business owners don’t think of HR documentation as an essential function of their company. What is on most owners’ minds is hiring the right personnel, ensuring quality products and services and making a profit. Makes perfect sense! But when HR functions are ignored or put on the back burner, it sets up the company for liability.
I recently worked with a suburban company that did not have any policies and procedures written for employee conduct or basic employment laws (i.e. EEO, sexual harassment, fair labor). There was no employee handbook either so employees had little direction regarding rules, expectations, goals and so on. Everyone was doing their own thing so cohesion was lacking. There was friction among the employees and communication was flawed. The result? The quality of service suffered which negatively affected the company’s bottom line. So, yes! Your business is at risk if you’re lacking an employee handbook or a policy/procedure manual or at a minimum, specific HR policies designed to keep a company running smoothly in the eyes of the law.
Still need convincing? Consider this: a company that terminated an employee without proper disciplinary action. That employee filed a lawsuit for wrongful termination and won because the company couldn’t prove they followed proper steps when releasing the employee from her duties. The result? A huge payout to the employee that put a huge dent in the company’s profits.
Or, a company that allowed unprofessional behavior to occur between employees and didn’t have a reporting procedure in place for sexual harassment resulting in law suit filed by an employee. The outcome? The company was held liable in the eyes of the law, losing hundreds of thousands of dollars in court costs, fees and penalties, not the mention the beating their reputation took.
You wouldn’t drive without car insurance, right? Not only is it against the law to do so, it’s foolish. Why would you run your company without proper HR documentation? It’s the same thing. Think about it. Don’t put your company at risk.
If you need additional guidance on creating proper HR documentation, feel free to contact me at Alexandra.G@comcast.net and/or visit www.glumacconsulting.com.
Alexandra Glumac is the founder of Glumac Consulting Group whose purpose is to strategically support your business’s mission, vision and bottom line through the coordination and facilitation of customized, quality and seamless HR services.