I thought I would write a two part series on what I believe to be Human Resources best practices. Part 1 will focus on processes and systems I think you should have in place and part 2 will explore best practices that will have some costs attached to them but for which I feel the payback would make them worthwhile.

By having â??best practicesâ? in place I believe that you are more likely to make better hires, more effectively retain your better employees, and expeditiously terminate your poorer performers. The end result would be building a better performing and more successful enterprise.

Processes and Systems:
The first thing I think a company should have in place is a comprehensive Employee Handbook. A well written handbook lets all the employees now what your specific â??rules of the roadâ? are. It will set the tone for the organizational culture you want to have and avoid ambiguities in dealing with employee relations issues. It should also answer most of the questions employees might have, therefore saving you from having to explain and re-explain things.

The second thing I think all companies need is to set specific standards for attendance and punctuality. Most of the companies I speak with complain about attendance but none of them has ever had a specific attendance policy!

Besides the Employee Handbook and an attendance policy, there are three basic systems you should have in place: hiring, compensation, and termination.

Hiring:
A good hiring system should look at the hiring process from recruitment through orientation. Your key hiring document is your job description, so you should make sure all your job descriptions are current and accurate. You also need to make sure your job application is branded to your company and compliant with California law. Once you have these items in place, you can start to think about creating an advertising plan; how are you going to recruit for this position? OK, now youâ??ve done a good job of advertising and you have a large applicant pool, what next. You might want to consider some sort of prescreening interview to shrink the pool. In any event, you must have a standard interview guide that is specific to the job and keyed off the job description. Eventually, you will have a set of interview guides for all positions that only asks legal and job related questions that anyone could use. This will allow you to develop a consistent approach to hiring. You should also be thinking of using tests. I think testing is a great idea and it is perfectly legal as long as the test is job related and you given it to all your final candidates. Now that youâ??ve successfully interviewed and tested your applicants, you are ready to make your selection. It is critically important that you make a â??contingentâ? offer of employment subject to whatever background checking you will be doing. I recommend drug screening and a criminal background check as well as reference checking. All of this can be outsourced at a moderate cost. You should always be prepared to negotiate your salary offer. Youâ??ve finally hired the person, are you finished? Not by a long shot.

Now you need to think about your new hire orientation. This is really the first time the new employee will be interacting with the company. On the procedural side, you need to make sure all your new hire â??paperworkâ? is completed, the I-9 information checked, and youâ??ve given the employee all the legally required brochures from the EDD. But you also need to make the employee feel welcome! I suggest that a member of management (preferably the direct supervisor) take the employee to lunch on the first day. You should also â??buddyâ? the employee up with a coworker that is a valued employee. Finally, you should be planning some post-orientation discussions, maybe one week after starting, then a month, etc. It is important that you let new employees know that you want them to be successful.

Compensation:
Compensation includes both pay and performance measurement. A best practice compensation system will answer these questions for you. How much of a salary increase is too much, too little? How can I distinguish between excellent, average and poor performers? What should I offer as a starting pay rate? How can I control my salary related costs?

All companies with the exception of very small ones should have a rational salary structure in place. Your salary structure will benefit you in many ways. It will give you a systematic approach to starting pay; a systematic approach to salary increases and a fair, equitable, rational approach to merit pay. It minimizes the opportunity for pay discrimination and preferential treatment claims. It is easy to understand, everyone know the rules. And lastly, supervisors like it because it minimizes defensiveness and the â??squeaky wheelâ? approach to increases.

At the very least, a rational salary structure needs to have pay grades with structured grade minimums and maximums and a structured progression between pay grades. It can be enhanced by attaching a structured merit pay matrix linked to ranges within a pay grade.

Once you have a structure in place, you can now create a performance measurement system. You will need a performance review form(s). You will need to decide how often you will review performance. I recommend 45 days and 90 days for new hires and either annually or semiannually thereafter. There are many variations of performance appraisal forms, you could use one that that measures characteristics such as dependability, cooperation, etc. You could have a form that measures work, such as quality, quantity, etc. You could have a form that measures specific, detailed and targeted objectives, or you could have a combination of any of them. In any case, the end result should be some type of score. The score along with where they are in their pay range will determine what the merit increase will be.

Termination:
Whether an employee terminates for cause or voluntarily, you will need to have a process in place. Once again there are two components. The first is procedural. Are you giving the employee all the forms required by the EDD, COBRA or HIPPA, is the final paycheck ready, is the employee signing for it, are you explaining what additional paperwork the employee can expect, is the employee completing an exit interview?

The other part is what I call the paper trail. If the employee was terminated for cause, do you have good written documentation? I recommend a standardized and formal disciplinary process (which should be in the employee handbook). Have you created a â??termination fileâ? with all the documentation related to the termination such as performance reviews, disciplinary notices, attendance records, complaints, supervisor notes, etc? You want to do this ASAP. If you wait, people forget or move on and 10 months or a year later when you receive an agency complaint or a â??lawyer letter,â? you will be unprepared. You can read my prior blog â??Documentation is Kingâ? for more details.

Human Resources 4U specializes in helping companies develop effective Human Resource processes and procedures.

Human Resources 4U is a full service Human Resources consulting company specializing in small and midsize businesses. Note: This article is presented with the understanding that we are not engaged in rendering legal advice. If legal advice is required, the services of a competent attorney should be sought.