The benefits of HR Policies

We are working in one of the world’s most multi-cultural regions. Individuals from all over the world are coming to work in the Middle East. They are bringing their skills, excitement and hope as well as their beliefs and value systems. Leading a team where languages, viewpoints and behaviours may differ so substantially can be a challenge even for experienced line managers and HR teams alike.

Policies can support creating a common ground for all employees regardless of their background.

What are policies?

While top management determine the guidelines for the business, policies break these down further and define how the business runs. They support the strategic growth, the day-to-day operations as well as organisation’s culture.

What are the benefits?

Written HR policies provide numerous benefits to an organisation.

As companies are growing and hiring new staff, common standards need to be communicated. HR policies help all employees get and stay on the same page and support the company’s culture.

Companies can base their policies on best practices, set to foster innovation, increase the employee experience and strengthen the competitive advantage. Local companies can benefit from the flexibility which the UAE labour law gives them to adjust HR policies issued by their global head office to their specific requirements.

Determining the delegation of authority, roles and responsibilities are clarified for everyone. This, in return, reduces misunderstandings and ensures smooth workflows.

As such, well-written policies provide an opportunity to strengthen employee relations. Reflecting the needs of both parties, they describe the performance and behaviours expected from the employees and the support and guidance given by the company. Should any disciplinary actions need to be taken, they provide a clear framework for consistent and fair treatment and are to prevent lawsuits, as much as possible.

Hence, HR policies consequently serve as a reference point for all people matters.

Which policies to include?

The local laws outline a limited number of required procedures only. Chapter VI of the UAE Labour Law Federal Law No. 8 of 1980 and its amendments describes disciplinary actions whereas Law No. 2 of 2015 against Discrimination and Hatred focuses on the prohibition against discrimination in an employment context.

Companies can therefore decide which policies they implement depending on their needs, provided they do not conflict with the local laws. Typically, companies choose to cover the following areas in their policies:

Recruitment

Organisations can define how they link their strategic workforce planning with the operational recruitment activities like selecting candidates and rehiring former employees. Policies may also include an employee referral programme or deal with the recruitment of family members and relatives.

Code of conduct

Companies can set their own standards of behaviour in their code of conduct, which reflects the organisation’s daily operations, core values and overall company culture. The handling of bullying and harassment situations may be described here, too.

Compensation and benefits

Policies can outline the company’s approach to rewarding employees, eligibility of benefits and allowance and evaluating jobs. They may also include how the company will address salary reviews.

Leave

Besides mandatory leave, companies can support their employees’ wellbeing by providing additional leaves, for example, time off for parental and caring duties, sabbatical or study and exam leave.

Learning and development

These policies address the company’s view on training and can point out the resources available for employees to acquire and develop their skills. They can lay out the criteria for reimbursement of any employee-initiated training, if it is relevant to the job, or special assignments for the employee to gain new experiences.

Performance

Performance policies assist companies applying fair performance assessments. They can also provide guidance on how to deal with unacceptable conduct and help employees improve. A disciplinary policy is normally also in place.

Although there is no limit on the number of policies a company may have, a reasonable and practical approach should be applied. Companies should therefore evaluate the specific needs for their business, however, it is recommended to have the following policies at a minimum written and communicated to all staff:

  • Bullying, harassment and discrimination
  • Code of conduct
  • Disciplinary
  • Grievance

Just as the business evolves and changes, HR policies need to have an option to adjust to the changing business requirements or legal mandates. Do your policies provide you with that flexibility?

HR policies are an effective way to look after your organisation’s and your employees’ needs while providing guidance to handling common workplace issues. Contact us today and learn how we can draft tailored HR policies fit for your business needs.

Review your HR processes to remain legally compliant

It’s too easy to forget about gaps in a process until it’s too late. Employment contract weren’t signed or are missing. Annual leave is not recorded. An employee left but their visa hasn’t been cancelled. Beneficiary for life insurance have been left blank or not updated. Don’t let your HR processes cause your organisation financial or reputational damage! Conduct an HR audit!

For many, however, the word audit brings back dreaded images. External auditors requiring explanations about the state of the organisation, while HR teams are already overworked. Using the summer to create your own internal HR audit, you can get ahead of the curve, identify any gaps and take corrective actions.

Unless already part of the regular business procedures, an HR audit would need to be drafted to evaluate the current state of organisation’s HR policies, processes and practices covering

  • Recruiting and onboarding
  • Learning and development
  • Performance management
  • Total rewards
  • Employee relations
  • Offboarding

Discrepancies between policies, processes and practices can help your team can be become the basis for any enhancements. Any shortcomings can also be addressed and adjusted according to their requirement: compliance, best practice, strategy, operational execution.

The process for an HR audit generally follows these steps:

  1. Define the scope
  2. Draft the questionnaire
  3. Collect the data
  4. Identify any gaps
  5. Report the findings
  6. Take corrective actions

Draft the questionnaire

You can take a pre-defined audit checklist from the internet, create your personalised form or engage with an external consultancy.

Collect the data (legal requirements)

The UAE Labour Law Federal No. 8 of 1980 as amended provides you with the foundation for your HR audit. Any of your policies need to be aligned to it to be valid.

The law also defines in “Chapter III Employment Contracts, Records and Remuneration” what records a company must keep in a personnel file for each employee, if employing 5 or more:

  1. Showing the employee’s name, profession, age, nationality, place of residence, marital status, effective date of service, pay and whatever changes effected on the pay, penalties invoked against him, injuries and vocational diseases sustained by him, date of service termination and causes of that, and
  2. A card, divided into three parts, showing 1) annual leaves, 2) sick leaves and 3) other leaves.

As a company, you may need to review each personnel file and check all documents. Any missing documents need to be added, potentially requiring the employee to sign the document again. You can find more information keeping your personnel files up-to-date in our previous newsletter.

If employing 15 or more employees, companies need also to keep these registers:

  1. Register of wages, showing the dates for joining of service, and fixing the amount of daily, weekly or monthly pay, along with its benefits, or piece-meal pay, or the commission to each one of them, his working days, and the date for his final departure from work, and
  2. Register of work injuries, showing all work injuries accidents and vocational diseases sustained by the employees as soon as they’ve been brought to the knowledge of the company, and
  3. Regulations of the work, showing the daily working hours, weekly holiday, other holidays, necessary measures and precautions to be taken for avoiding work injuries, and fire hazards, which must be approved by the labour department and displayed visibly for anyone on company premises, and
  4. Penalties sheet, showing the penalties that may be invoked and citing the conditions and cases for putting them into operation

While the registers can be kept centrally, the owner may be outside of HR. For example, if Payroll belongs to Finance, they may keep the “register of wages” and given the inter-dependency, need to be part of the audit. The same would apply to any work injury documentation which may be kept by EHS and not HR.

Identify gaps

An HR audit requires more than just a tick on a checklist. It will reveal any gaps between the current state and the law, benchmark and organisational strategy.

Report the findings

Once the audit has been collected and the gaps have been identified, the audit team should summaries its findings and present them to the overall HR leadership team or even the company’s management team. Together, questions as to why certain gaps exist need to be asked and answered.

Take corrective action

This may then create the list of corrective actions. Legal compliance is a must and recommendations for corrective action need to account for these first and foremost. The audit team may prioritise any other corrective actions by importance (high, medium, low) and/or impact (high, medium, low) before determining owners and timelines for these.

The audit findings and action plans need to be documented. This can be used as a continuous improvement activity, working towards becoming more effective, efficient and innovative HR.

While HR audits can be perceived as expensive due to the time and resource commitment required, it will be less than the financial and/or reputational damages suffered by unscheduled labour inspections or court cases.

Stay legally compliant. Review your current policies, procedures and practices, identify any gaps and create an action plan to be consistent and compliant. Contact us and find out how we can support you and your team in conducting.

Excel vs ERP – How to find the right tool for your organisation

Over the years, we’ve worked with a large number of clients coming from all industries and ranging from the small start up to publicly listed organisations with over 100,000 employees. What do all of our clients have in common? It’s their desire to be more efficient and effective in their strategic and daily HR operations.

Like most companies, they are asked to achieve more with fewer resources and streamlining their processes is crucial. They use data to make decisions and to take their organisation to the next level.

The digital transformation is mentioned everywhere.

A number of organisations have rushed out to buy the latest enterprise resource planning (ERP) solution without doing a thorough review of their needs. The organisation’s capability, processes and readiness for change may not have been considered, either. How can these companies achieve their desired state? Do they know what this even looks like?

“If you don’t know where you are going, you might wind up someplace else.” (Yogi Berra)

If companies don’t know what their data says, how can they reach their (strategic) destiny?

This is the dilemma many companies, whether established or still young, face. For many, Excel is still the tool of choice while others swear by their ERP. We’ve dedicated this newsletter to review the options and for you to identify the appropriate solution for your organisation.

  1. Easy start vs implementation

Purchasing a licence for Excel is as easy as saying 1-2-3. A user can take the free tutorials giving overviews of the basics, formulae or pivot tables. A new user of Excel can choose from the many courses available on the internet and doesn’t have to wait for any in-person training courses.

An ERP system is connected to other parts of the business. The different dependencies can make an EPR implementation a challenge for any project manage. Anyone who has ever been through an ERP implementation recalls the lengthy process and may have experienced the different stakeholders pursuing different, potentially also conflicting requirements. Finding a system that can do everything for everyone within the given budget is not straightforward.

  1. Single source of entry vs collaborative working

Data entry into Excel is generally controlled by one person at a time which potentially slows down the processing time. Other team members can still access (non-shared) files as a read-only version, however, any updates for their data analyses won’t be included.

While multiple users can edit an Excel spreadsheet, changes aren’t tracked unless the “track changes” box is selected. Many Excel users aren’t aware of this function and, thus, don’t activate it. There’s the risk that data is overridden incorrectly or changes being made without having a complete change flow.

An ERP system allows multiple users to change and access the data simultaneously. ERPs automatically track the changes, making it easier to backtrack any steps, as needed.

A cloud-based ERP gives users the flexibility to access the data and process requests from other devices, e.g. tablet or smart phone. Companies may restrict access from personal devices according to their data protection and IT regulations. For wellbeing practitioners, this raises also the question when managers can actually switch off, just like with the permanent inflow of emails.

  1. Static vs real-time data

As just touched upon, data in Excel tends to be static. Multiple files are often pulled together into one worksheet to gather a comprehensive view and, consequently, analysis. Most businesses don’t operate on a fixed-date basis anymore and changes within the organisation are more fluid.

An ERP system provides real-time data at the click of the finger button. Reports have been defined as part of the implementation process or are being added to meet business requirements. While creating new templates may take some time, generating the reports is generally completed within a very short time.

  1. Single control vs transparency

The information in Excel is often maintained by a small group of HR team member. This may be to reduce the number of entry errors. Files need to be made available to other areas of HR (e.g. via a shared drive) and the business, bringing up the question of version control and data privacy if accessed on non-secure devices.

Depending on the company’s philosophy and managers’ maturity, not all data will be shared with all line managers. Accordingly, files need to be adjusted to what the individual line manager is allowed to see, taking more time to complete a sometimes simply query.

On the other hand, an ERP is already set up with the restrictions of who can see what. Managers are enabled to pull their own reports when they need them, not when HR has the time to process them.

  1. Independent vs integrated processes

For many, Excel is still an independent part for many HR processes.

ERP systems, in contrast, combine various HR processes from recruitment and onboarding, over cyclical performance and salary reviews to learning and development plans.

Conclusion

Before you determine whether solution is appropriate for your business, review your organisational architecture (e.g. culture, structure and how your business operates). You may also ask yourself questions around your current practices in Excel and how you can modify those before investing (sometimes heavily) in an ERP:

  • What do your current processes look like? Are there any areas which could be optimised?
  • Based on the current processes, could you tweak them and still utilise Excel? Which templates and communication schedules would you need to create to increase efficiencies through Excel? What training can you provide to HR team members to enhance their knowledge around Excel?
  • How open is your company to change when implementing an ERP? To what degree is your organisation willing to adjusted processes for an ERP (remember: often the organisation has to adjust to the workflow of an ERP, not the other way around)? How much would daily operations be interrupted for both the business and HR when moving to an ERP?
  • What ownership, flexibility and transparency do you want to give to your line managers? What would approval processes and DOA look like under an ERP?

Are you unhappy with the data quality in your organisation? Do you feel time is wasted but can’t pin point to the issue? Call us on +971-52-2516322 and find out how we can identify wasteful process areas and create efficient and effective processes fit for your team and company.

HR documentation – Why you need to take it seriously

For many companies, February/March is the time when HR teams are supporting management with the reviewing the annual salary adjustments, setting performance goals and identifying actions for low performers. Unfortunately, it’s also the time when HR teams are asked to terminate a low performing employee.

While local legislation provides employers with different options to terminate the employment relationship, companies are open to financial and legal risk if no or insufficient documentation is in place. And yet, HR teams are underestimating the importance of keeping complete and up-to-date personnel files and HR documentation.

Legal requirements. UAE Federal Law No. 8 of 1980 (as amended) or, in short, the Labour Law prescribes content an employer needs to keep in the employee’s personnel file. It’s mainly basic personal information, the salary history as well as any penalties, injuries/vocational diseases and details around the termination. In addition, the employer needs to keep records of 3 different leave types (annual leave, sick leave and other leave). The legal requirements can easily be fulfilled, although there are still HR teams that don’t have these fundamental records in place.

Financial risks. HR teams without proper documentation for the statutory requirements or in case of any disputes expose their company to fines and compensation. Financial fines vary as outlined in the labour law, other laws and statutes.

Dismissed employees may be able to claim for compensation if their termination is perceived arbitrary. To prove the decision was qualified, HR teams needs to present supporting written documents to the court when such a dispute is heard. Verbal presentation of such is not permitted. Should there be no documents, it’s an easier decision for the court to award compensation to the dismissed employee, payable by the former employer.

Legal risks. In addition to the financial risks, the courts may suspend the company’s operations or even imprison the HR Manager if no adequate documentation is available. Previous cases have shown the extend of personal liability of an HR Manager and it’s not worth the risk.

In the case of a disciplinary procedure, the company may issue warnings. The first warnings may be given verbally and, upon repeat of the unacceptable behaviour and/or actions, in writing. By not documenting the verbal warning or filing the written warning in a timely manner, HR teams expose the company when the dispute is brought up to the court. The same risk exists if an internal hearing has been held but the decision has not been communicated to the employee in writing.

Best practices. A number of global companies like IBM and Google have altered their approach to performance management and are moving away from the 2-3 formal discussions per year. Instead, the trend is focus on forward-looking skills improvements and immediate feedback. Although these companies may no longer demand lengthy evaluation reports, they still require managers to document the “feedback chats” in a short, yet, precise paragraph, often entered into an electronic performance management system or sent to a specific email. Who remembers what feedback they’d given to one of their 8 direct reports 7 months ago?

Companies are also spending substantial amounts on increasing their HR services and reducing delivery times through cloud-based systems like SuccessFactors and Workday, which support the HR team’s e-filing efforts. While not every organisation has the budget or the need for such a system, HR teams need to identify the following for their record keeping:

  • What are you documenting? Besides legal requirements, consider performance, rewards and recognition, job changes, learning and development plans and outcomes, violations and warnings.
  • How are you documenting? It should be factual, non-judgmental, objective and fit for purpose. Don’t forget to date and sign it.
  • Where are you storing the documents? Consider whether it needs to be in paper-based personnel file or can be stored electronically, on company premises or in a secure offsite location.
  • When are you documenting? Consider not only when you are creating the actual document (e.g. timely to the actual event) but also whether you’re filing electronic documents immediately or batch file paper documents on a daily basis.

Do you want to improve your documentation standards and procedure, be compliant with the labour law and save valuable time? Call us on +971-50-5516322 and learn how an efficient process can reduce your risk of being exposed to financial and legal risks.