9 Essential Documents To Set Up A Department Of Human Resources

IN THIS ARTICLE

Setting up a department of Human Resources and wondering where to start?  Start here!

• Find out about the top 9 must-have HR documents for your HR start-up, why they're important, and how to  get started with each.
• Get free downloadable & customizable templates that are written in plain English & formatted consistently so they're easy to read. 

Bottom Line

When setting up a department of human resources from scratch, it makes sense to prioritize your efforts.  Here's what made the cut for our top 9 list of key HR documents listed in priority sequence:

#1.  Employment Contract Agreements

What is it?

A contract signed by a company signing authority and an employee that documents in writing the key terms of the employment relationship.

Why it's important

• It's the most critical CYA document in your department of Human Resources. It's your pre-nup when the honeymoon is over and things go sour. 
• Clarifies dos and don'ts during and after employment, particularly if the employment contract includes non-compete, confidentiality, and defamation clauses. 

How to get started

• Consult an employment lawyer who specializes in your industry to create your employment contract agreement templates that will be re-used in your department of Human Resources . Employment contracts vary from industry to industry and type of employees. For example, a salesperson's employment agreement would include important clauses about commission structures.  A construction worker's employment agreement would point to safety clauses.

#2.  Employee Handbook

What is it?

It's a manual that explains a company's main human resources and employee programs, and policies and procedures. Departments of Human resources often use an employee handbook to protect themselves from lawsuits, such as wrongful termination claims.

Why it's important

• Creates a 'rule book' that establishes a code of conduct for employees and communicating guidelines for what's acceptable and unacceptable in the workplace
• By signing off on the employee manual, an employee agrees to abide by the established guidelines that helps prevent workplace NOTMICs (no one told me I couldn't)
• Provides employee protection against Attila the Hun managers and difficult co-workers when everyone understands the expected behaviors and the consequences of non-adherence
• Clarifies expectations for both the company and the employee
• Fast tracks orientation and eliminates employees asking the department of Human Resources the same questions and receiving a different answer
• Often used as an addendum to employee contracts and is often signed off by the employee annually.

How to get started

• Fast-track version:
  • The truth is that most employee manual topics that protect the company are the same for most companies in the same jurisdiction.  Purchase an employee manual template from a reputable vendor and launch the policies that protect you as an employer.
• More accurate version:
  • Hire an HR consultant (costly) or an employment attorney (very costly) to develop your employee manual.

#3.  Job descriptions

What is it?

It's a written statement of duties, responsibilities and other success factors associated with each unique position. 

Why it's important

• It's a key document for your department of Human Resources and the foundation upon which #4 and #5 are built
• Provides clarity for employment contracts, probationary periods, and ongoing performance management
• Used for comparison to internal & external positions to determine fair market value and salary for the job
• Used to summarize company structure in an org chart

How to get started

• Fast-track version:
  • Send job description form to all employees and include deadline and instructions for completing
  • Forms are reviewed by line managers and approved
  • Forms are sent to HR or de facto HR
• Less biased and more accurate version:
  • Internal professional HR or external HR consultant to conduct job evaluation interviews for each position based on chosen criteria

Free HR resources

Download a free editable Job Description Form Template which includes an instructions document for managers and employees

#4.  Hiring Processes

What is it?

It's your department of Human Resources' documented process related to the following HR functions:

• clarifying the position
• advertising the position
• interviewing
• tracking applicants
• conducting reference checks for potential new employees.

Bringing new talent on board is always a priority and doing it well is a challenge. Documented process provides your department of Human Resources and hiring managers with step-by-step procedures and access to additional standardized resources such as forms, manager guides, and spreadsheets.

Why it's important

• Consistency – everyone goes through the same process
• Clarity – responsibilities, accountability, and checklists are defined for each activity.  Everyone understands the role HR and the Hiring Manager play in the recruiting process 
• Completeness – steps are not duplicated or overlooked
• Due diligence – HR/Hiring Managers do their homework before opening a new position and hiring the final candidate
• Professionalism – you provide the right first impression of your company, and treat job applicants and candidates appropriately
• Compliance – you adhere to legislated requirements and employment standards
• Training - Often managers have  no experience with hiring new employees and many may not admit it.  This way, they don't have to!

How to get started

• Determine, document and communicate your processes for recruiting and hiring that can be used by anyone in your company who needs to bring a new hire on board

Free HR resources

Toolkits & Free Templates to create your Hiring Process

#5.  Performance Management & Involuntary Terminations

What is it?

Managing employee performance and coaching employees is a fundamental part of a manager's job in the following 4 areas:

• Probationary periods
• Annual performance reviews
• Performance improvement plans
• Involuntary terminations

It provides managers with a framework that helps them manage and support the most expensive asset in your company:  employees. 

Why it's important

Managers bring their own experience (or lack of it) to their jobs, and interpret their role and responsibility in managing performance based on that experience.  Without a common guide and clearly communicated expectations, you will not have consistent practices or results.

• Provide a reference for managers on how employee performance is managed in your company.
• Set expectations for the accountability of managers to follow the approach and processes it outlines.

How to get started

That's a tough one.  Creating 4 performance management systems from scratch and ensuring they're integrated and aligned is a difficult task.  

We try not to be self-serving when writing these articles, but in this case, we highly recommend taking a look at the Free HR Resources below to get access to premium HR forms and guides that are pre-written in plain English for your managers and staff.  It's the fastest, easiest way to get your performance management system in place.

Free HR resources

Perforformance Review Examples  

#6.  Manager Guides

What is it?

Documents made available to your managers that provide detailed procedures, resources and how-to information on HR topics that affect managers such as hiring and performance management.

Why it's important

• Provides your managers with step-by-step processes so they know what to do, when and how. 
• Eliminates an inexperienced manager having to come to management to ask for help - because very often, they simply won't. 
• Ensures that all managers are executing on HR programs in the same way.
• Guides become 'good cop' when managers are too harsh, or 'bad cop' when they're too soft.
• Protects your company when managers understand the limitations surrounding most HR topics.
• Trains your managers and communicates how you want things done. 
• Ensures managers adhere to your culture and values.

How to get started

• Hire an HR professional or HR consultant to interview you about your employment philosophies to create your manager guides accordingly.

Free HR resources

View a list of manager guides.  Preview all manager guides and download any one editable guide or document of your choice.

#7.  Time Reporting System

What is it?

A system that records, tracks and reports on employee exception hours outside of regular hours worked - typically overtime for non-exempt employees and absences.

Why it's important

When an employee is paid for time not worked, the company is not getting productivity in return. Paid absences represent a cost to the company and must be tracked: 

• To reduce the employee's annual entitlement bank of paid absences to accurately reflect the decrease in liability.  If an employee takes 2 days of vacation and that absence is not recorded, they remain on the company's books as a liability to be paid out either in additional time off or as a pay-out when the employee leaves the company.  Remember that 5 days of paid absence equates to 2% of salary. Not chump change for small business.
• To track and report on non-productive employee costs, such as absences related to training or sick days.
• To track additional hours worked by employees for overtime payment purposes.
• Managers and employees need access to vacation and sick time balances to plan time off accordingly. 
• If absences become excessive, managers can address the situation with historical data.
• Your department of Human Resources' time tracking system almost completely eliminates the common scenario of an employee coming back to the employer after they have left the company to claim that overtime is owed . It is the employer's responsibility to implement a time tracking system, otherwise an employee's entries on a paper napkin trump no records at all. 

How to get started

• All payroll providers have a system for entering exception time reporting.  The hard part is not recording it with the payroll provider, it's documenting an employee's exception hours, obtaining a signature, and communicating these hours to payroll.
• Depending on the size and type of your small business, assign administrators to be responsible for recording employee exception hours for each department and for obtaining employee signatures for each bi-weekly, weekly, or monthly basis.  This can either be maintained in a spreadsheet and printed, or with timesheets.  

#8.  Employee Data & Reporting

What is it?

Recording, maintaining and reporting on employee data.

Why it's important

As your company grows, your department of Human Resources' ability to quickly and accurately access employee information becomes critical. Why? Because the CEO and senior management team will want to know how many employees you have (headcount), how many employees are leaving the company (turnover), how many employees are active, inactive, on leave, etc., the cost of compensation, and the frequency of changes in the workforce; i.e., transfers, promotions, relocations. 

Management analyzes employee data to make informed HR decisions.

How to get started

You can easily include all employee data in one document – an Excel workbook.  It enables you to rapidly respond to requests for information, and analyze and report on the data.  It makes you look like the business analyst you are! And by deploying Excel as your employee “database” you will save the Company money on systems that may be too big or unwieldy for its size.

1. Start with your payroll provider.  Download the current available data such as employee name, salary, hire date and create an Excel spreadsheet. 
2. Create a form with other up-to-date employee data you require.  For example: emergency contacts, level of education.  Circulate to employees and input the data.
3. Supplement the data with HR information such as the employee's manager, department, employment status, last performance review rating, or anything that you or your management team feel should be reported on.

#9.  Web Career Pages

What is it?

OK, it's not an HR document, but it's an important element of content for your department of Human Resources.

It's a page or pages on your company website to market yourself as an employer to attract the type of people you're looking for to work at your company.  Think of your Careers section of your website as a micro site that is owned by HR.  It doesn't always have to mirror the brand of your products or services. You are marketing yourself as an employer - not as a provider of products or services.  Your Careers section should speak to your audience of prospective employees. 

Why it's important

• It showcases your open position and provides an opportunity for marketing yourself as a good employer.
• Manages prospective employees' expectations and helps to disqualify individuals who don't fit with your culture.
• Clarifies the mechanism to apply for a job.

How to get started

• Determine your value add as an employer and what you want to communicate to prospective employees.  Be honest!  This is not a good place for smoke and mirrors.
• Work with your marketing or web development team to create your career pages

Free HR resources

Sign up for a free ConnectsUs trial and hop on the kit tour.  The tour includes a page that discusses creating your career web pages.

Once these documents are in place, you'll have a solid foundation for your department of Human Resources in place upon which to build.  You can also find out about HR documents and templates grouped specifically to create a department of Human Resources.

RELATED ARTICLE:  Find out if you have what it takes to implement HR.

Ariane Laird is CEO & Founder of ConnectsUs HR, a company that provides tools & resources to quickly set up a Human Resources department.   You can contact her directly from the Inquiry Type drop down menu.