The main purpose of formulating the HR policy is to assist the top executives in reaching the decision in a given situation. The process of policy formulation involves the following steps:
1. Identifying the Need:
If an organisation does not already have an appropriate personnel policy, the personnel manager should feel its needs.
He should also convince the chief executive of the need of a personnel policy. Policies are required in various areas of personnel management such as hiring, training, compensation, industrial relations etc.
A staff expert, a first-line supervisor, a UN ion leader or a rank-and-file employee may voice the need for revision of an existing policy.
2. Gathering Information:
Once the need for a policy has been accepted, the next step is to collect necessary facts for its formulation. A committee or a specialist may be assigned the task of collecting the required information from inside and outside the organisation.
Facts may be gathered from any of the following sources:
(i) Past practice in the organisation.
(ii) Prevailing practice among the companies in the community and throughout the nation in the same industry.
(iii) The attitudes and philosophy of the top management.
(iv) The attitudes and philosophy of middle and lower management.
(v) The knowledge and experience gained from handling countless problems on a day-to-day basis.
The HR department should study existing documents, survey industry and community practices and interview people within the organisation to collect appropriate information.
Special attention should be paid to attitudes and philosophy of top management, social customs and values, aspirations of employees, labour legislation etc.
Widespread consultations and discussions at this stage prove helpful later on when it comes to applying the policies.
3. Examining Policy Alternatives:
On the basis of data collected, alternatives are appraised in terms of their contributions to organisational objectives. It is necessary to secure active participation of those who are to use and live with the policies.
4. Putting the Policy in Writing:
After the necessary information has been gathered and the alternatives examined, the HR department can begin the actual work of formulating the written expressions of the company’s HR policy. While writing the policy, emotional phrases should be avoided.
5. Getting Approval:
The HR department should send the policy draft to the top management for its approval. It is the top management which has the final authority to decide whether a policy adequately represents the organisation’s objectives or not.
6. Communicating the Policy:
After getting the approval of the top management, the policy should be communicated throughout the organisation. A real education programme should be set up to teach people how to handle various personnel problems in the light of this newly formulated policy.
7. Evaluating the Policy:
From time to time the policy should be evaluated in terms of experience of those who use it and of those who are affected by it. There may be situations when an organisation is not getting the expected results.
This requires modifications in the policies. Any serious difficulty with a policy along with suggestions should be reported to the top management.
Such knowledge will enable the management to decide whether there is a need to restate or reformulate the policy.