9 Things You Should Consider Before You Update or Transform Your HR Policies

With the growth of digital, AI and data-science, businesses have needed to adapt and evolve to remain relevant in today’s world. In particular, there’s been significant disruption in the Fintech space and many Financial Services organisations , like banks, have needed to reengineer themselves and their propositions to maintain success.

This has presented a huge challenge for many companies who have operated more traditionally for a long time, and have relied on ‘command and control’ methodologies when it comes to managing staff. Typically, these organisations would have used policy and governance to survive, which in our modern business landscape simply doesn’t work.

Oasis HR Think Tank Series Transformation HR Policies

Back in May, we received valuable insight into the transformation that Lloyds Banking Group has undergone over the last decade, following the impact of the recession and the arrival of numerous challenger banks. David Marsden (Head of Policy and Transformation) hosted one of our Think Tanks, where he shared Lloyds’ journey from being a bureaucratic and policy-heavy bank, to creating an environment built on trust, empowerment and success. Based on Lloyds’ experience, and the collective expertise of our HR Leadership community, we share nine things you should consider before you update or transform your HR policies.

1. Change the culture before you transform your HR policies

Before you even think about a policy revamp, it’s important you ask yourself if you think your business is ready for change? It’s inevitable that you’ll meet some opposition from long-standing employees who might say ‘but it’s always been done this way?’… but how deep-rooted is this adversary and is it likely to be a blocker? If it is potentially going to cause you issues, it’s important to address the company’s broader culture, purpose and values before you start making changes to your policies prematurely. Re-emphasise or re-define your values first. The resistance will be less and the transition a whole lot smoother.

2. Less is more

There is no point having a bunch of HR policies in your business if they’re sat on a shelf collecting dust. Whilst it’s agreed that some policies still do have a place, many organisations are reframing them as ‘guidelines’ that help their people react/deal with certain situations. These policies/guidelines should be simple, easy to interpret, adaptable and should be geared around the business’s core purpose.

Businesses that have paired back their policy frameworks have suggested selecting 8-10 of the most important ones and refreshing them to be more relevant. Your HR Business Partners should help you facilitate this chance and should be supporting your managers with anything that feels too ‘daunting’ to tackle independently.

Something to ponder…

  • Why does a dress code policy need to be any more complicated than ‘dress for your day’? 
  • Removing a sick leave policy in one business (meaning time off for illness was ‘unlimited’) actually reduced absence rates significantly.

3. Address the cause of health and wellbeing issues first

Rather than writing prescriptive policies that enable managers to deal with employee health issues and the consequences, start being more proactive with championing wellbeing initiatives. What is your business doing to support its workforce with both their physical and mental health? Don’t underestimate the impact of wellbeing on employee engagement, morale, absenteeism and productivity.

4. Empower line managers to use their own judgement

HR is about humans and the human element is about communication and relationship building. In order for this philosophy to be successful in a business we, as HR, need to equip and empower our managers to build this type of engagement. However, you cannot teach ‘empowerment’, it’s about creating a culture that promotes it.

For businesses that encourage their managers to use their own common sense and judgment, it generally involves shifting from a parent/child to an adult/adult dynamic. However, it’s important to be mindful that not all managers will be able to exercise their judgement in the same way, so guidance, coaching and training will be critical.

Something to ponder…

  • By having overly-prescriptive policies in place, are we letting off our manager population lightly by removing the need for them to think for themselves?
  • Should we be using the Cynefin Framework to help upskill our line managers around problem-solving?

5. Get better at hiring the right people

If a large proportion of your workforce are resistant to embracing what it means to be an employee, are you hiring the right people? How rigorous is your recruitment process and is it aligned to the values and culture of your business? Investing in your screening process, so you hire the ‘right’ people, will save you all sorts of issues later down the line. It’s empowering to be able to say to your workforce ‘we chose you, we invested in you, we want you to be successful, we aren’t going to be prescriptive (because we believe in your ability), we just want to do the right thing by you as an individual and the broader company.’

6. Start trusting your employees

There are certain segments of the HR community who like polices being part of their tool kit and might feel slightly exposed without them. And of course, certain policies are still very much needed and relevant. However, it’s about being brave enough to trust your employees to deliver and be successful. The way individuals respond to flexible working is often a good barometer of a business’s culture in terms of whether staff embrace it or abuse it. This should also tell you how other policy changes might be received!

7. Work collaboratively with your Unions

Relationships with your Unions can influence policy effectiveness in your business. It really helps if you don’t treat them as the enemy! Working collaboratively with your Unions will help you get their buy-in and achieve far more together than if you choose to lock horns.

8. Improve the quality of conversations that managers hold with their direct reports

In addition to empowering managers to use their own judgement, it’s essential to invest in your line-manager capability and give them the tools to hold good quality, coaching conversations. One business in particular reported success with totally removing performance management ratings and replacing them with the following five questions:

  • How’s it going?
  • How are you getting on with your objectives and goals?
  • How are you helping others achieve their goals?
  • How are other people helping you achieve your goals?
  • What action could you take to improve further?

9. Keep an eye on key success metrics to measure the impact of your HR policies

It’s important to measure the effectiveness of your policies by monitoring success indicators like engagement survey results, absence rates, grievances, retention, length of service, exit interview feedback etc. You need to ensure you are providing channels for employees to provide their feedback, thoughts and feelings, in order to promote a ‘listening’ culture. However, it’s worth noting that if you’re continually needing to update/tweak your policies in light of the feedback, then they’re probably not working effectively and you could lose credibility!

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