Written by: Jillian Climie.
When you hear the words "HR policy" and "structure," excitement might not be the first emotion that comes to mind. Often, these concepts conjure up feelings of restriction and frustration. After all, we want to do our best work, and HR policies can sometimes seem like barriers.
But the reality is that setting up effective HR structures not only allows us to focus on what really matters but also helps us make better decisions. Here’s how.
It saves leaders time. As we get more senior in our careers, more of our role ends up being HR related, even if we don’t realize it. I’ve met many senior leaders who see HR as an administrative function only - someone to administer benefits and payroll, write employment handbooks and handle HR compliance issues. I then ask that leader about their own day-to-day activities, and find out that they are inundated with performance issues from their employees, retention challenges, and culture issues like workplace conflict. Without realizing it, they are spending the majority of their time on HR-related issues.
Building HR structure increases efficiencies in all of these areas. For example, setting up clear performance metrics for employees tied to compensation, creating career pathing to incentivize growth, and training middle managers on navigating interpersonal conflict.
While setting up HR policies may not be the most exciting part of the job, it saves leaders countless hours down the road.
It enables us to hire, promote and compensate the best candidates. We are all subject to biases, whether we realize it or not, and these biases can influence critical decisions in the workplace. For example:
Hiring someone based on our positive gut reaction after an interview. This might seem like standard practice, but the similarity bias could be clouding our judgment. We are more likely to see future potential in someone who is similar to us (for example in how they look or act) even if they are not actually the best candidate for the role.
Deciding bonus payouts without using clear performance metrics. Recency bias can have a big impact here. We’re more likely to remember a huge win in the last couple months versus something nine months ago, even when the bonus is supposed to be for the full year.
Not promoting an employee because she seems too aggressive in pushing for the promotion. The likability bias could be impacting here. We expect women to be nice and agreeable in the workplace, so when they exhibit behaviours that may be seen as “assertive” by a man, we deem a woman as “aggressive”.
These are just a few of the many examples of how bias can lead to decisions that frustrate employees - and when employees are frustrated, they leave. Having structured processes for hiring, promotions, and compensation helps to mitigate these biases and ensure you’re attracting and retaining top talent.
HR can be your competitive advantage. The best companies realize that HR isn’t just a support function - it’s a strategic asset. A company's success is driven by its people, and to get the best outcomes, you need the best team. Employees want to feel valued, fairly treated, and confident that their work makes a difference. In all the discussion on products, services and strategies, this core fact can get lost.
Need help creating HR structure that builds diverse, inclusive, and high performing teams? Book a call with The Thoughtful Co. today.
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