Chapter 1

Personnel Policy

Resource Person: Arbab

 Personnel Policy
 Person- Individual human being
 Personnel- People employed in an organization/
staff of an organization.
 Program- Blend of HR objectives, policies &
procedures (Overall plan for HR)
 Policy- A plan of action. A policy statement
contains general philosophy & principles regarding
concern matter. Guide for action (frame work).
 Procedure- Chronological sequence of steps in order
to accomplish means of policy. Method to carry out
policy.
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 Personnel Policy- A policy which deals with
directives & guidelines regarding HR of an
organization.
 “Personnel policy is designed to provide
managerial and supervisory staff with uniform
knowledge in order to assure equitable and
consistent application of the policies. It is the
responsibility of each manager and supervisor to
administer these policies consistently and
impartially to promote the equitable treatment of
employees”.
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 Importance of Personnel Policy
I. To bring uniformity & continuity in work
II. Standard of Performance
III. Stability in actions
IV. Loyalty among workers
V. Provides guideline for HR planning
VI. Ensures discipline
VII. Compliance with government legislation

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 Personnel Policy Formulation
 Policies are not created in vacuum. There are five
principle sources to determine the contents and
meaning of policies.
1. Past practices in organization
2. Prevailing practices among other companies of same
nature in a region.
3. Attitude & philosophy of board of directors and top
management.
4. Attitude & philosophy of middle & lower
management.
5. Day to day problems faced by organization
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 Kinds of Personnel Policy

1. Idealistic Personnel Policy

2. Realistic Personnel Policy
3. Flexible Personnel Policy
4. Inflexible Personnel Policy
5. General Personnel Policy
6. Specific Personnel Policy

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Effect of
Environmental Factors
Upon Personnel Policy
Environmental Scanning and
Analysis

SCANNING ANALYSIS

ACTION
 EXTERNAL ENVIRONMENT
Legal consideration Labor Force

INTERNAL ENVIRONMENT
The Economy

Mkt OPS

Employee Human
Staffing
& Labor Resource

Society
Relations Development

HR Management
technology

Functions Compensation
Safety
& Benefits
& Health
Fin. OFA

Customer Completion Share holder Unions 9

 The External Environment
Components
 Labor Force  Competition
 Legal  Customers
Considerations  Technology
 Society ( Social  Economy
Responsibility)
 Unions
 Shareholders

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 The External Environment:
Proactive Versus Reactive
 Reactive Response: Action taken in
response to change
 Proactive Response: Action taken in
anticipation of change

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The Internal Environment
 Mission  Employees
 Nature of Business  Labor-Management
 Corporate Culture Agreement
 Management Style
of Upper Managers

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 Implementation of Policies

 Formulation of policy
 Approval by higher authorities
 Formatting policy
 Communication of policy with all concerns
 Implementation

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 Role of Personnel Department
 Policy Initiation & Formulation
 Advice
 Services
 Controlling & Monitoring of Deviations

Microsoft Word
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 Entrepreneur’s philosophy
Management/leadership styles
 Autocratic- Centralized authority, unilateral decisions
without input from employees, power is with chair only.
 Democratic style- delegated authority, participative
decisions.
 Laissez-faire style- complete freedom to employees to
make decision and complete work in whatever way it fits.
 Consensus- Every one has to agree. Either convince or get
convinced.
 Transactional Style- compromising relationship between
leadership & subordinates. Give & take.
 Contingency style- policies are made with provision to
change according to situation. 15
Functions (Scope) of Personnel Policy/HRM

1.Staffing

5.Employee 2.Human
& Labor Resource
Relations Functions
Development
of Personnel
Policy/HRM

4.Safety & 3.Compensation

Health & Benefits
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 1.Staffing
 Process through which an organization ensures that it
always has the proper number of employees with the
appropriate skills in the right jobs at the right time to
achieve the organization’s objectives.
 It includes
• Job Analysis
• Personnel planning
• Recruitment
• Selection

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 2.Human Resource Development
 Major Personnel function that consist not only of
T&D but also individual career planning,
developing activities and performance appraisal.
 HRD is composed of
• Training
• Development
• Career planning
• Career Development
• Performance Appraisal

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 3.Compensation & Benefits
 Consist of all direct, indirect, financial & non
financial rewards given to employees in return of their
services.
• Pay - Money that a person receives for performing a
job
• Benefits – Additional Financial rewards in addition to
base pay including paid vocations, sick leave,
insurance etc.
• Non financial Rewards
 The Job
 The Environment

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 4. Safety & Health
 Safety involves protecting employees from injuries
caused by work related accidents. Health refers to
employee’s freedom from physical or emotional
illness.
5. Employee & Labor Relation
 Deals with employee employer relationship &
dealing with labor unions

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