CORPORATE LEADERSHIP COUNCIL® APRIL 2007

www.clc.executiveboard.com

Fact Brief
Creating and Managing HR Policies
Profiled
Industry Headquarters Location Employees Revenues
Institution
A Chemicals United States 2,000–10,000 Over $10 billion
B Manufacturing United States 25,000–50,000 Over $10 billion
C High-Tech United States 2,000–10,000 $500M–$2 billion
D Financial Services United States 10,000–25,000 $2 billion–$10 billion
E Financial Services United States 2,000–10,000 $500M–$2 billion
F Financial Services United States 50,000–100,000 Over $10 billion
G Financial Services Canada 25,000–50,000 Over $10 billion

Issue Overview: HR Policies Drive Organizational Success

Organizations adopt HR policies to drive organizational success because policies govern adherence to regulatory
requirements and applicable laws, support business and employee performance, and reinforce a positive employee value
proposition and employee engagement, as detailed below:

• HR Policies Minimize Employment and Labor-Related Litigation—Comprehensive HR policies enforced consistently

across relevant employee groups help mitigate the risk of employment- and labor-related litigation, which is expected to
increase in 2007.1,2
• HR Policies Improve Employee Performance via Employee Engagement—Past Council research indicates that
organizations can drive employee performance through engagement, particularly in areas that contribute most to
employee engagement, such as direct managers, the company’s senior executive team, and compensation and benefits
plans. HR policies govern aspects of these areas, thus helping drive employee performance.3
• HR Policies Drive Employee Attraction and Retention via Effective Employment Value Propositions—Recent
Council research reveals that an effective employment value proposition (EVP) is critical to talent attraction and
commitment; core attributes of EVPs that drive attraction and commitment, such as development opportunities, future
career opportunities, respect, meritocracy, and ethics, are each regulated by HR policies.4

Table of Contents: Summary of HR Policy Creation and Management Lifecycle

Step 1—Establish Central HR Policy Group.....................................................................................................................Page 2

Step 2—Assess and Create Policies................................................................................................................................Page 3
Step 3—Obtain Final Policy Approval from HR Leadership .............................................................................................Page 9
Step 4—House Policies in a Central Location..................................................................................................................Page 9
Step 5—Communicate with and Educate Employees about HR Policies.........................................................................Page 10
Step 6—Continuously Enforce Policies ............................................................................................................................Page 13
Step 7—Review Policies Regularly and As Needed ........................................................................................................Page 14

Appendixes ......................................................................................................................................................................Page 15
Research Methodology ....................................................................................................................................................Page 17
Guide to Tables and Figures ............................................................................................................................................Page 18
Cited Sources...................................................................................................................................................................Page 19

 2007 Corporate Executive Board. All Rights Reserved.

Catalog No.: CLC15NYT7D
CREATING AND MANAGING HR POLICIES PAGE 2
APRIL 2007

Step 1: Establish Central HR Policy Group

Before creating new policies or reviewing existing policies, organizations establish a permanent central HR policy group housed
within corporate HR. The corporate policy group creates and maintains all HR policies across functions and locations, ensures
alignment of policies, and minimizes overlap or contradiction of policies, as depicted below.

Figure 1: Core Responsibilities of

The HR Policy Group

Creation

Communication/
Review
Deployment

Enforcement

When establishing the HR policy group, organizations consider the broad range of competencies and skill sets required to
create and maintain HR policies, which include the following:

Figure 2: Core Competencies of Effective HR Policy Groups

Knowledge of organization’s Employment and labor law

Relationship-building skills
missions, values, and strategic goals

Regional, functional, or line HR content and operations

Communications
knowledge

In particular, relationship-building constitutes a core skill for HR policy groups due to the numerous stakeholders involved.
This is especially true when establishing global HR policies, which typically involves a complex process due to cultural and
legal differences across geographies. Relationship-building skills encourage and expedite policy implementation, enforcement,
and review by enhancing communication about HR policies across groups.

Because of the range of skills required for HR policy creation, the HR policy function is typically led by an HR employee at the
manager or director level with primary responsibility for HR policy. At most profiled organizations, the HR policy manager or
director is supported by a small number of HR staff. To ensure that all skill sets are represented throughout the policy creation
process, this policy group leverages the expertise of numerous other functions and HR employees, including communications,
legal, IT, HR content experts, HR business partners, and HR generalists. This research details the role of these various groups
during the policy creation and maintenance process in the following pages.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 3
APRIL 2007

Step 2: Assess and Create Policies

Step 2a: Prioritize Assessment of Policies Based on Impact

The responsibilities of the corporate HR policy group vary depending on the sophistication of an organization’s policy
maintenance procedures. Policy groups update organizations’ existing library of HR policies to remove outdated, repetitive,
or contradictory policies as well as manage incoming requests for new policies given limited resources. To prioritize policy
assessment, the group considers the core drivers behind each policy and the degree of impact on the organization.
These drivers influence the management of HR policies throughout the policy lifecycle and drive approval levels,
communication tactics, enforcement, and frequency of review. Most drivers affecting HR policies reflect risk management
needs, but vary among the three perspectives detailed in Table 1 below. (This table depicts a composite of drivers identified by
Company D, Company E, Company F, and Company G.)5

Table 1: HR Policy Drivers

• Adhere to regulatory requirements and legal obligations, including those specific to

Legal and Regulatory
certain industries (e.g., Sarbanes Oxley, the Bank Secrecy Act at banking organizations)
Compliance • Educate employees about possible sources of risk

• Address practices specific to an organization’s unique culture, operating model, industry

• Drive profitability via established operating procedures and performance standards
Business Operations
• Drive employee productivity through known procedures and performance standards
and Performance
• Provide leaders/managers with tools to govern effectively
• Drive ability to compete with organizations in a similar industry

• Maintain consistent practices of importance to employees

Employee Preference • Provide equitable privileges and benefits across the employee population
and Engagement • Define performance and behavioral expectations for employees
• Enhance employee relations and engagement, thus driving performance and retention

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 4
APRIL 2007

Step 2: Assess and Create Policies (Continued)

Step 2a: Prioritize Assessment of Policies Based on Impact (Continued)

Research indicates that organizations typically prioritize HR policies addressing legal and regulatory compliance above others
because of the severe consequences for non-compliance; that said, prioritization varies depending on organizations’ unique
goals and initiatives. The figure below presents an illustrative form for prioritizing HR policy assessment based on the overall
effect of the policy; a similar form may be adapted for use throughout the policy review and assessment process.6,7

Figure 3: HR Policy Review Prioritization Form

Customer/Source of Request:
Include contact name, function, and Jane Doe, HR Business Partner in Product Sales
business unit.

Reason for Request: There have been numerous complaints from our sales employees, who rely on company
Provide a brief explanation for this request. cars to perform their jobs, indicating that our policy is too stringent.

Current policy requires employees living more than 20 miles from the office to leave their
company car at the office each night and use their personal car to commute to and from
Description of Proposed Policy/
work. While this policy is designed to minimize wear on our cars, it provides preferential
Update to Policy:
treatment to employees residing close to the office. In addition to being a hassle for
Provide a brief description of the proposed
employees residing beyond the 20 mile radius, it negatively affects productivity. Employees
policy or change; also indicate the goals
living outside the 20 mile radius often serve clients relatively close to their homes, wasting
the organization will achieve by
time for employees that must commute to work and then travel a far distance to reach their
implementing/updating this policy.
clients. As such, the proposed change is to allow for exceptions on a case-by-case basis for
sales employees outside the 20 mile radius with clients located close to their homes.

Adherence to relevant regulatory or legislative requirements: 1 2 3 4 5

Needs Analysis:
On a scale of 1 to 5, with 1 representing no
effect and 5 representing the highest
degree of effect, rank the policy based on
its impact on the areas to the left. Please
indicate the rationale for each ranking.
Rationale for ranking: There are no laws specific to this component of our car policy that
we are aware of, although law does influence other aspects of our car policy.
Ability to improve business operations/drive business performance: 1 2 3 4 5
Rationale for ranking: Will improve overall productivity of sales employees by minimizing
travel time for some.
Ability to meet employee needs/preferences while driving
employee performance: 1 2 3 4 5
Rationale for ranking: Will greatly improve morale of affected sales employees by
reducing stress associated with long commutes and improve productivity by minimizing
travel time for some employees.

Target Employee Demographic:

We anticipate that this will apply to all sales employees using company cars.
Identify the target employee group to which
(Approximately 100 employees)
this policy will apply.

 2007 Corporate Executive Board. All Rights Reserved.

 CREATING AND MANAGING HR POLICIES PAGE 5
APRIL 2007

Step 2: Assess and Create Policies (Continued)

Step 2b: Conduct Preliminary Policy Assessment

Once the policy group determines HR policy priorities, the group conducts a preliminary assessment of each policy. If the
assessment is initiated by a specific request to review an existing policy or establish a new policy, the group begins by
collecting background information from the requestor, particularly the driver behind the request. The policy group then cross
references the requested policy with current and past HR policies to determine if it warrants creating a new policy, revising a
current policy, or no further action. This preliminary review includes the following model process, representing a composite
across profiled organizations:

Figure 4: Decision Tree for Conducting HR Policy Reviews

Does this policy (or a similar policy)

currently exist?

If yes… If no…
Does an existing policy Does the proposed policy Has your company Did the same (or a
cover all components of contradict an existing considered requests for similar policy) ever exist
the proposed policy or policy? the same (or a similar at your company?
fully address current policy) in the past?
need?

If yes… If no… If yes… If no… If yes… If no… If yes… If no…

Take no Consider Consider Consider Evaluate Consider Evaluate the Consider

further action revising the conducting conducting the rationale conducting rationale for conducting
policy further further for not further eliminating further
assessment of assessment establishing assessment the existing assessment
the proposed of the existing the policy of the policy of the
and existing policy proposed proposed
policies policy policy

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 6
APRIL 2007

Step 2: Assess and Create Policies (Continued)

Step 2b: Conduct Preliminary Policy Assessment (Continued)

If the policy group determines that an issue warrants further consideration, it may become apparent that the topic is not suitable
for application as a policy and is most appropriately addressed by a procedure or guideline. As such, the policy group may
conduct a second level of assessment based on the definitions and questions provided in Table 2 below, which reflects a
composite culled from profiled organizations’ practices and literature. If the answer to all of the questions in a category is “no,”
the issue is not appropriate for that category level.8

Table 2: Guide for Distinguishing Policies from Procedures and Guidelines/Standards

Policies are overarching, high-level guides to action or decision-making under specific circumstances that ensure consistency and
legal compliance within a framework of corporate objectives and values. Policies do not detail specific actions or decisions, but
serve as a guide for making related decisions. Organizations typically do not allow exceptions to policies. Policies address a
company’s mission and values, are central to the type of business, and facilitate compliance with laws and regulations.
Policy

Related Questions:
• Does this issue speak broadly to the company’s overall missions, goals, or values?
• Does this issue generally address characteristics specific to the industry or type of business?
• Does this issue aid in compliance with relevant laws and regulations?

Procedures detail specific methods for accomplishing a task. They support policies and inform how policies are carried out but are
not a statement of the policy itself. Procedures may include components such as the circumstances in which the procedure is
Procedure

applied and the parties responsible for carrying out the procedure. Procedures may or may not be coupled with a specific policy and
allow for exceptions, where applicable.

Related Question:
• Does this issue detail specific steps or methods for carrying out an action?
Guideline/Standard

Unlike policies, guidelines and standards provide recommendations and preferences for behavior but do not indicate necessity,
Guidelines provide an alternative to policies for issues that organizations want to address but that are not central to the operations of
the organization or its employees, do not address compliance with laws or regulations, do not have a significant effect on business
performance, and do not have a significant effect on employee performance.

Related Question:
• Does this issue recommend or indicate a preference for behavior, as opposed to a requirement?

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 7
APRIL 2007

Step 2: Assess and Create Policies (Continued)

Step 2c: Determine Level at Which Policy Is Applicable

Upon deciding to create a new policy or update an existing policy, the policy group determines the level at which the policy
applies to the employee population, such as globally, by country, by business unit, or by department. The group assesses
policies by considering the drivers behind each policy using a layering process. (Appendix A on page 15 indicates the level of
applicability for HR policies at two profiled organizations.) As the policy moves through the layering process, it must continue
to align with each relevant broader policy. Figure 5 below depicts the model process for determining applicability.

Figure 5: Model Process for Determining Level of Policy Applicability

Figure 5a: Overview of Process Figure 5b: Example of Compensation Policy

Global
Global
• Does this policy define how the company operates and how
employees are generally expected to conduct themselves? • An organization adopts a global policy indicating that
• Does the policy address the company’s mission and values? compensation is linked to performance.
As such, is it addressed in the company’s Code of Conduct or
Standards of Business Conduct?

Home-Country Home-Country
• Is this policy suitable for adoption by affiliates in all • Within a particular country, the pay-for-performance
countries? If not, the policy is not eligible for universal compensation policy indicates that a specified percentage
application. If organizations feel that the topic must be of an employee’s potential pay is based on performance.
addressed in all locations, the organization must allow for
variations of the policy that meet country-specific criteria.
• Does the policy address compliance with laws or
regulations that apply to an entire country?

Functional/Business Unit Functional/Business Unit

• Does this policy address operations that are
specific to a particular function, department,
business unit, or other work group?
• Within that compensation policy, the sales
group adopts a pay-for-performance policy
dictating that 50% of sales employees’ salaries
are based on performance (i.e., amount of
sales).

Step 2d: Filter Policy through Relevant Stakeholder Groups

After the policy group establishes the appropriate level of applicability, it creates a draft version of the policy that is deployed to
a network of key stakeholders. The overall review process is similar regardless of the level of applicability of the policy,
with some core distinctions addressed in the figure on the next page. The process may require several rounds of revision and
review to ensure applicability at all relevant levels. A model of this filtering process is depicted in Figure 6 on the next page;
it represents a composite of effective practices across all profiled organizations.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 8
APRIL 2007

Step 2: Assess and Create Policies (Continued)

Step 2d: Filter Policy through Relevant Stakeholder Groups (Continued)

Figure 6: Model Process for Filtering HR Policies to Relevant Stakeholder Groups

1) Core Policy Group Drafts Policy and Deploys to Relevant Content Experts
The process begins with the core policy group creating a draft of the policy. The policy is then forwarded to HR content experts and
content experts from additional functions, as needed.

2) Content Experts Review Policy

Experts in HR and external functions review the policy for content relevant to their areas of expertise. These functions may communicate
back and forth several times before agreeing on the content and returning a draft to the HR policy group.

HR Review Additional Content Review

Relevant corporate HR content experts review and edit
the policy, regardless of the level of applicability of the
policy. Typically, ultimate ownership of the policy lies
within the relevant HR content group. (That said, global
policies are more general in nature and, as such, less
likely to require extensive review by content experts.)
After review of HR content, certain policies may require
additional review from outside functions, such as the
following:
• Legal—Ensures compliance from a legal perspective
• Finance—Assesses the potential cost implications
associated with implementing or altering a policy
• IT—Assesses technology-related HR policies,
such as telecommuting

3) Core Policy Group Deploys Policy to Global HR Network*

Upon review of the policy by relevant content experts, the core policy group deploys the policy to a permanent network of global HR
contacts; such a network is useful for building consensus around HR policies. These contacts, typically at the manager or director level,
represent either a specific country or global region.

4) Global HR Network Conducts Country-Specific or Regional Policy Review*

Each member of the global network is responsible for reviewing the policy within the context of the country or region he/she represents,
with particular emphasis on the following:
• Ensuring compliance with labor laws—To accomplish this, each global HR contact consults with a legal representative for review.
Interviewed individuals indicate that it is helpful for HR representatives to have at least basic knowledge of labor and employment
law for the country/region they represent. As an additional measure, the contact is responsible for ensuring consistency with any
local legislation governing the organization’s locations.
• Ensuring the policy translates to local cultures, traditions, and customs—Ensuring alignment with such “soft” measures increases the
likelihood that employees will implement, understand, and follow the policy.

5) Core Policy Group Considers Revisions Made by the Global Policy Network and Deploys to Relevant Business
Units/Departments*
The HR policy group considers all comments and suggestions made by each global HR contact. This step of the process is particularly
time-consuming due to the range of laws and cultures across regions and/or countries. The creation of HR policies that are globally
applicable may require several rounds of review between the global HR network and the core policy group to ensure the legality and
alignment of the policy across all locations. Once the policy group has established a draft that meets country or regional qualifications,
the policy group deploys the policy to the relevant business units and/or departments.

6) Relevant Business Units/Departments Review Policy

Upon review at the global level (if applicable), affected business units and/or departments review HR policies. At this level, it is typically
the responsibility of HR business partners to ensure relevance to their particular business unit. As mentioned previously, policies are
more specific as they cascade down managerial layers, and organizations may allow variations in policies to accommodate for functional
differences. As with global policies, this step may require several rounds of review between the relevant business units or departments
and the policy group to ensure relevance and alignment.

7) Core Policy Group Forwards Policy to HR Leadership for Approval

Once a draft of the policy is agreed upon by all parties, the core policy group forwards it to HR leadership for final approval,
as described on the following page.
*The core policy group omits this step if the policy is not globally applicable.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 9
APRIL 2007

Step 3: Obtain Final Policy Approval from HR Leadership

Once all relevant stakeholder groups endorse the policy, the final draft is typically approved by HR leadership at the VP level;
this may include either the VP of HR or a VP of the related HR content area (e.g., VP of Compensation and Benefits).
Interviewees at profiled organizations indicate that approval at a high level demonstrates a commitment to the policy and
encourages implementation and enforcement of the policy. That said, final policy approval may be delegated to alternate levels
based on the overall impact of the policy, including the following:

• Escalate to Senior VP of HR, CEO, or Board of Directors—HR policies with a high degree of impact or constituting major
changes may be escalated to the Senior VP of HR and, in rare circumstances, the CEO or Board of Directors.
• Deescalate below VP of HR—Final approval may be granted at lower levels if the policy impact is limited or if it constitutes
minimal changes to an existing policy.

To maximize efficiency and speed when implementing HR policies, the policy group at Company F evaluates the level of
necessary approval on a case-by-case basis, dependent on the following factors:

Table 3: Considerations for Determining Appropriate Level

of Final Policy Approval at Company F
Factors Indicating Executive Level of
Policy Drivers Consideration
Approval
• At what level is this policy applicable?
Level of • High/broad level of applicability
• Does this policy affect the whole organization
Applicability • Large number of affected employees
or a smaller group?
Legal and
• What are the legal implications of this policy? • Substantial legal implications
Regulatory
• What legal risks does this policy mitigate? • High effect on mitigation of legal risks
Implications

Effect on • How will this policy impact business • High impact on business performance
Business performance? • Potentially strong or negative response by
Operations/ • How will the public and consumers react? public/consumers
Performance • What is the financial impact of this policy? • Costly financial implications

• Large effect on employee value proposition

• What effect does this policy have on the
• Company is favorably positioned compared to
Employee employee value proposition?
competitors and seeks to remain so
Engagement • Where does the company want to be relative
• Company fails in comparison to competitors
to competitors in establishing this policy?
and seeks to improve positioning

Step 4: House Policies in a Central Location

Profiled organizations report that the most efficient means for housing HR policies is a central location, such as a database.
To help ensure the alignment and consistent management of policies across an organization, the database (or alternate central
repository) contains a collection of all HR policies across all lines of business and departments. Interviewees at Company D and
Company F indicate that the most sophisticated databases contain current policies and an historical archive of former policies
and past versions of policies. Therefore, access is typically limited to the HR and legal functions. Specific components of
effective HR policy databases include the following:

Figure 7: Components of Effective HR Policy Databases at Company D and Company F

Tracks Changes in Policies across Time—Effective policy databases capture changes in policies over time and document the
reasons behind such changes. Maintaining records of former policies is beneficial for legal reasons, as employment- or
labor-related litigation is commonly retroactive. That said, organizations must ensure use of the most current version of the
policy and can do so by including tracking numbers and dates on all policies. (See Appendix B for a sample policy template.)
Includes Policies that Were Considered but Not Implemented—Comprehensive HR policy databases include polices that
were considered in the past but not implemented, along with the reasons the organization declined to implement the policy.
This saves the HR policy group time and resources when assessing requests for new policies.
Manages HR Policies Specific to All Departments and Lines of Business—The database should include policies from all
departments and lines of business to ensure alignment and to avoid duplication efforts by permitting business units to reference
content contained in existing policies created for other groups.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 10
APRIL 2007

Step 5: Communicate with and Educate Employees about HR Policies

Profiled organizations educate employees about new or updated HR policies using employee self-service measures and
customized push communication tactics. Research reveals that offering multiple communication channels ensures that policy
changes reach a broad audience and allows companies to easily provide rapid communications, thus aiding in timely policy
implementation and enhancing policy compliance.9,10,11

Self-Service Communication Tactics

Employee self-service tactics used to communicate changes in HR policies include company intranets and call centers.
A poll of 35 member organizations conducted by the Council in June 2005 reveals that 60% of employers allow access to
company policies via employee self-service. The figures below further detail the advantages and challenges of Web-based
self-service and call centers for HR policy communications as identified by profiled organizations and literature.12,13,14,15,16

Figure 8: Benefits of Self-Service Policy Communication Tactics

Web-Based Self-Service Employee Relations Call Centers

Profiled organizations use company intranets as the key Three profiled organizations leverage employee relations
communication vehicle for HR policies, citing the following (ER) call centers in addition to Web-based self-service.
advantages: The call centers provide the following benefits:

• Convenient access—Providing all HR policies in a central
location provides easy, quick access by most employees.
The most-user friendly intranets include links to relevant
forms and documentation.
• Data collection and tracking capabilities—
Comprehensive Web-based self-service systems allow
employees to submit questions or feedback on HR policies
via the company intranet, providing valuable data
leveraged by the policy group during review and
assessment of policies. For example, this feedback
mechanism can inform the group of any HR policies that
are unclear or do not accurately address current needs or
concerns. Company intranets also allow the policy group
to track the frequency with which a specific policy has been
viewed or searched for; this helps the group understand the
issues and policies of most interest to employees.
• Policy interpretation and application—Call centers
provide managers with guidance around policies and help
determine consequences for non-compliance. They also
aid managers with the interpretation of policies specific to
unique employee situations, providing advice on how to
apply a policy or to work within a policy.
• Data collection and tracking capabilities—Similar to
Web-based self-service, the interactive nature of call
centers informs HR about which policies are of most
interest to employees, are vague or confusing, or may be
outdated and, as such, warrant review.

Figure 9: Challenges Associated with Self-Service Policy Communication Tactics

Despite the benefits of self-service identified above, profiled organizations and literature indicate the following
challenges associated with self-service communication tactics:
• Encouraging employee use of self-service resources—Self-service tactics are ineffective when employees are not
motivated to use such resources or are unaware of their existence.
• Providing access to self-service—Various employee demographic groups do not have equal access to self-service,
particularly remote workers or deskless workers.
• Providing customized policy information—Self-service may not allow organizations to provide relevant, customized
policy information to employees based upon their geographic location or function. Because policies are applicable at
varying levels, profiled organizations cite a proliferation of targeted Web sites relevant to geographic locations or functional
areas. To overcome this, the central policy group requires that all HR policy Web sites link to the corporate HR policy
Web site, thus ensuring proper alignment of business unit and corporate HR policies.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 11
APRIL 2007

Step 5: Communicate with and Educate Employees about HR Policies (Continued)

Customized Push Communication Tactics

To mitigate the challenges and risks associated with self-service communication tactics, profiled Council members also establish
customized communications plans for deploying new policies or communicating changes to current policies. When creating a
communications strategy, HR partners with the communications function or leverages the expertise of internal HR
communications employees. Organizations develop effective communications strategies by customizing communications for the
target employee audience, considering the factors identified by profiled organizations in Table 4 below.

Table 4: Considerations for Customizing HR Policy Communications

• Does this policy constitute a major change? As such, should the communication strategy include
repetition and follow-up?
Potential Impact of
• How are employees likely to respond to the policy?
Policy on Affected
• To what degree must the communications strategy explain the rationale behind the change?
Employee Populations
or Businesses • Must communications include interactive components, allowing for employees’ feedback and questions?
To what degree should the communications strategy allow for a response from employees?
• What are the risks associated with a “bare bones” communications strategy?

• To which employee groups is the organization communicating this policy?

• What are the skills sets, attributes, etc., of the employees to whom this policy is being communicated?
Scope of Policy
• What are the unique cultures of relevant employee groups that inform effective means for communicating
this policy?

• Must this policy be communicated to the entire organization or to smaller subsets of employees?
Number of Affected
• What is the most effective way to communicate this policy while balancing the size of the target audience
Employees
against resource and time constraints?

Based on the considerations detailed in Table 4 above, the HR policy communications strategy may include customized push
tactics such as mass communications, face-to-face communications, or a combination of both. While mass communication
strategies are cost-effective and allow organizations to quickly reach a large audience, face-to-face communication strategies
allow for interaction and feedback and better reflect the importance of the policy. However, minor changes in policy affecting few
employees may not be proactively communicated to employees at all. The interviewee at Company F, for example, indicates
that a change in policy regarding transgender employees will not be communicated the employee population because it affects a
small number of employees. Instead, interested employees can access the policy on the company intranet. The figure on the
following page presents common push tactics for communicating HR policies used by profiled organizations and identified in
literature.17,18,19

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES
APRIL 2007
Step 5: Communicate with and Educate Employees about HR Policies (Continued)
Figure 10: Common Push Communication Tactics
Mass Communication Tactics
Considerations for Use:
Mass communication methods allow organizations to reach
large groups of employees in a time- and cost-efficient
manner. However, the associated risks of these methods
are that employees may not read mass communications
and do not have the opportunity to ask follow-up questions.
Further, such tactics may not translate globally, potentially requiring
additional communications customized by geography.
Tactics:
Specific mass communication tactics used by profiled organizations
include the following:
• E-mails sent to the affected employee population
• Policy handbooks, either online or in hard copy format, that
employees must review and then submit documentation
indicating their review of the policies
• Notes inserted into paychecks
• Home mailings
• Announcements posted on company TV
Example:
The interviewee at Company G reveals that communications about
benefits policies are more likely to be mailed to all employees’
homes because of the importance employees place on benefits.
In addition, that medium allows spouses and other family members
to see the change in benefits policies, which commonly affect those
dependents, as well.
 2007 Corporate Executive Board. All Rights Reserved.
PAGE 12
Face-to-Face Communication Tactics
Considerations for Use:
Face-to-face tactics include those communicated to
employees directly from senior leadership,
business unit leaders, HR, and managers;
changes are first deployed to leaders and managers, allowing
preparation for questions from direct reports and customization,
as needed. Face-to-face tactics are commonly used to communicate
policies with a high degree of impact or that constitute a major change.
These tactics are particularly useful when communicating policies
globally because they are first vetted through leaders or HR in each
country, allowing for customization of communications in a way that is
effective for the target population.
Tactics:
Communicating to HR/Managers/Leaders
Profiled organizations first communicate to the groups responsible for
delivering the change to employees via the following methods:
• E-mails/newsletters
• Meetings
• Postings on limited-access intranets
• Manager training (especially for compliance- and ethics-related
policies)
• HR generalist/business partner relationships with relevant
business unit leaders
Communicating to Employees
Profiled organizations typically deliver policy changes to the general
employee population through staff meetings, new hire orientation, and
training after communicating to HR, managers, and relevant leaders.
 CREATING AND MANAGING HR POLICIES PAGE 13
APRIL 2007

Step 6: Continuously Enforce Policies

Once policies are communicated to the relevant employee populations, organizations continuously enforce them to guarantee
compliance. To do so effectively, profiled companies place responsibility for enforcement at various levels, including individual
employees, managers, the human resources function, and company leadership. That said, the degree to which organizations
enforce policies depends on the specific policy and the possible implications of the policy, with regulatory and legal
compliance-related policies enforced most diligently and from the highest levels within the organization. Figure 11 below depicts
a composite of methods leveraged by profiled organizations to enforce HR policies.

Figure 11: Mechanisms for HR Policy Enforcement by Level of Responsibility

Individual Employees
• Successful Job Performance—Responsibility for policy enforcement begins with individual employees.
As several interviewed members reveal, employees typically recognize that policy compliance is critical to
successful performance of their job functions and is often built into employees’ daily work activities.
• Regular Review of Company Policies—Organizations typically require employees to review policies on
a regular basis (usually annually) to facilitate enforcement of and compliance with those policies over time.
Companies may also require employees to sign a letter or statement indicating their review of the policies.

Managers
• Performance Evaluations—Managers are typically responsible for evaluating direct reports via regular performance
reviews; a component of the reviews address observance of HR policies, with noncompliance negatively affecting
assessments of employee performance.
• Letters of Compliance—Managers at Company A must sign a letter indicating that they have communicated relevant
HR policies to their direct reports. Via the letter, managers indicate compliance with all relevant policies. In the event of
noncompliance, managers must outline a plan for achieving compliance in the letter.
• Review Checklists—Organizations also provide managers with a comprehensive checklist of policy areas for which
they maintain responsibility. Managers are expected to assess policy compliance regularly using the checklist as a
guide.

Human Resources/Employee Relations

• Random Policy Audits—Company G conducts random audits to assess compliance with the most critical HR policies. Due to
resource constraints, HR may leverage the expertise of the corporate audit group to conduct audits on HR’s behalf; this is particularly
true for policy-related data that is not tracked within the company’s HRIS and, therefore, requires more time-consuming review.
• Call Centers—Several profiled organizations leverage the employee relations group to ensure proper enforcement of HR policies
(as mentioned in Figure 8).
ƒ HR Generalists/Business Partners—Similar to their role in communicating policies, HR generalists and/or business partners
collaborate with business unit leadership and managers to ensure that enforcement of HR policies is embedded in organizational
practices, such as performance reviews. Like call center employees, HR generalists and business partners also assist with the
interpretation and application of HR policies because of their knowledge of HR content and operations.

Leadership
• Leadership Approval of Policies—As discussed in Step 3 on page 9, approval of HR policies at senior levels assists with policy enforcement by
demonstrating the importance of and signaling a commitment to the policy by leadership.

• Compliance Training—Company A conducts compliance training and business practice review every four years for most employees
(except wage employees). The training consists of a two-hour session, led by auditors and controllers, addressing the organization’s main ethics
and foundation policies. Company A standardizes its training globally by providing slides and a training script to all locations prior to training.

ƒ Compliance Reports—To further demonstrate a commitment to policy compliance at high levels, organizations require senior leadership to
provide reports detailing policy compliance for their associated businesses to the company’s Board. Policy reports are most commonly used to
demonstrate compliance with policies addressing ethical, legal, and regulatory matters and include a report of compliance for the prior year, as
well as future initiatives to further compliance across their relevant businesses.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 14
APRIL 2007

Step 7: Review Policies Regularly and As Needed

Research reveals that organizations review all HR policies on a regular basis and as needed to evaluate their continued
accuracy and applicability. Profiled organizations report varying lengths of time between regular policy reviews ranging from
every five years to every year. To help ensure that HR policies are reviewed with regularity, the policy group details components
such as review dates and ownership for policy review within the policy itself, and establishes review calendars. These tactics
are detailed below.

Figure 12: Tactics for Maintaining Regular Review of Existing HR Policies

Policy Template with Instructions for Review Review Calendar at Company D

Profiled organizations include components dictating policy review To facilitate the review process, the HR policy
within each HR policy, including the following: manager at Company D maintains an annual HR
policy review calendar.
HR Policy Template Review Process:
• Policy Name The calendar indicates when an HR policy will be reviewed, with
• Tracking Number approximately 5 to 6 policies (or groups of policies) reviewed per
• Ownership of Policy month. Prior to review, the policy manager conducts relevant
• Creation Date background research, such as any new legal requirements,
• Date of Last Revision affecting the policy. The policy manager then meets with the
• Date of Last Review policy group to determine if the policy requires revision.
• Date of Next Scheduled Review
Benefits of Review Calendar:
The core benefit of the review calendar is that it helps balance
Appendix B on page 16 provides an HR policy template detailing workloads throughout the year and ensures that relevant
the components indicated above. stakeholders or content experts are prepared to participate in
review procedures. The calendar also helps ensure
implementation and enforcement of HR policies by indicating that
policies will be reviewed at a specified time.

Although organizations regularly review HR policies, the frequency depends on the drivers behind the policy and possible
ramifications for not reviewing such policies. That said, several occasions warrant review outside of regular review cycles, on an
as-needed basis, including the following:

• Changes in legislation
• Litigation against the organization (or another organization with similar policies)
• Changes in competitors’ policies
• Frequent requests for information or questions by employees
• Unique employee issues that may warrant review

As mentioned previously, organizations prioritize HR policy review to balance demands with available resources. For existing
policies, Company G tracks inquiries using an issues log to aid in review prioritization.

Figure 13: Issues Log for Managing HR Policy Review at Company G

Purpose: To help the HR policy group understand policies requiring more frequent review, the policy group at Company G
maintains an issues log. The policy group uses the issues log to track the smaller issues that arise specific to a policy over time,
as well as approved exceptions to policies.
Action: Once the issues log contains a collection of approximately 10 to 15 issues gathered via the company intranet and the ER call center,
the HR policy group reviews that particular policy, using the log to guide potential revisions.
Result: The issues log helps the HR policy group manage limited time and resources by preventing review of a policy each time a minor issue
arises.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 15
APRIL 2007

APPENDIX A: LEVEL OF POLICY APPLICABILITY AT PROFILED ORGANIZATIONS

The following chart indicates the level at which policies apply (either at the global level or country level) at two organizations.
Interviewees indicate that most policies applicable at the global level vary by country to ensure their relevance across locations.
It is important to note that the level of policy applicability varies by organization, with policies addressing legal and compliance
issues, ethics, standards of business conduct, and the company’s general operating principles, values, and mission commonly
applied at the global level.

Company Globally-Applicable Policies Country-Specific Policies

Ethics Business travel guidelines
Conflicts of interest Expatriate management
Corporate assets Home offices
Directorships Transfer to new home country payroll
Gifts and entertainment Memberships
Political activities Reimbursement of loss of cash
International operations Commuting expense
Antitrust Paid time off and holidays
A Health Leaves of absence
Environment
Safety
Product safety
Customer relations and product quality
Alcohol and drug use
Equal employment opportunity
Anti-harassment
Standards of conduct Background investigations
Discipline policy Promotions and salary increases
Workplace violence Performance evaluation periods
Equal employment opportunity Dependent care
Anti-harassment Alcohol and drug use
Educational assistance
X* Employee referrals
Employment references and verification
Paid time off and holidays
Family and medical leave
Military leave of absence
Additional leave (e.g., bereavement, jury duty)
Short- and long-term disability
*Company X was not interviewed for this research, but provided relevant documentation used in the creation of this appendix.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES PAGE 16
APRIL 2007

APPENDIX B: HR POLICY TEMPLATE

This appendix provides a policy template specifying components for inclusion in HR policies. Effective HR policies help ensure
implementation and compliance by establishing ownership and providing clear directions for managing specific situations.
In addition to this template, organizations may develop company-wide standards addressing general content and formatting
rules to create a consistent look across all company policies.20

HR Policy Template

Policy Name

Tracking Number: Organizations tag each HR policy with a tracking number for easy identification and tracking.
Organizations use tracking numbers in addition to policy names to avoid confusion with policies with similar names or
on similar topics.

Ownership of Policy: This section indicates the primary contact person maintaining ownership of and responsible for
administering the policy, as well as the specific group or function responsible for the policy (e.g., HR, compensation
and benefits, recruiting). Organizations may list additional functions contributing to the development of the policy,
such as legal or IT. Identifying ownership of the policy helps establish accountability for implementation, compliance,
and regular review of the policy, as well as appointing a contact person should questions or concerns about the policy
arise.

Key Dates: HR policies include several key dates, as listed below, to ensure that policies are reviewed on a regular
basis and are up to date, reflecting changes in legislation or company initiatives.

• Original date of creation

• Date of last revision
• Date of last review (effective date)
• Date of next scheduled review

Statement of Policy: This section provides a detailed explanation of the policy, covering all components of the policy,
including the following:

• Introduction—The introduction identifies the rationale for the policy and the goals the company hopes to achieve
by implementing the policy. A comprehensive introduction section helps obtain buy-in for the policy, particularly
for those viewed as unfavorable by the employee population.

• Specific Procedures—To aid employees in proper execution and compliance, the policy indicates specific
procedures designating how the policy should be carried out. For example, a policy requiring background checks
for new employees may detail the specific steps for conducting legal, appropriate background checks.

• Applicability of Policy—The policy should clearly designate all employee groups to whom the policy applies to
ensure proper compliance by all affected employees.

References to Relevant Documentation: This section of the policy directs employees to documents or forms used
to carry out the policy, including Web links to documents on the company intranet or other directions for obtaining and
submitting relevant documents.

 2007 Corporate Executive Board. All Rights Reserved.

CREATING AND MANAGING HR POLICIES
APRIL 2007
THE RESEARCH PROCESS IN BRIEF
Research Methodology
Project Aims
PAGE 17
The Corporate Leadership Council conducted a comprehensive search of published
materials regarding the creation and maintenance of HR policies, drawn from previous
Corporate Executive Board research, trade press journals, other research organizations,
and the Internet. Council staff then interviewed human resources professionals at seven
organizations. This report represents the findings from secondary and primary sources.
1. What are the key drivers for creating and maintaining HR policies?
2. Does the company maintain global policies? If so, which policies are applicable
at a global level and how does the company determine that?
3. What is the policy creation and approvals process?
a. What is the governance structure/chain of command? Is it centralized,
decentralized, or mixed?
b. How does the process vary depending on the type of policy?
c. What functions beyond HR are involved in the process?
4. How does the organization accommodate variations across locations or functions
within HR policies?
a. What are the drivers behind the variations in policies?
b. How does the organization ensure that policies are aligned and consistent
given such variations?
5. Who gives final approval for HR policies? Is there a decision matrix or set of
criteria that determines responsibility for approval?
6. What is the approvals process?
7. How does the company deploy and communicate HR policies to the workforce,
particularly to various geographies and functions?
8. How does the organization enforce policies? Who maintains responsibility for
enforcing the policies?
9. How does the organization ensure that policies remain up-to-date?
 2007 Corporate Executive Board. All Rights Reserved.