1.

Employment contract

In India, it is crucial to file proper documentation of the employees that work in the company.
The employee contract acts as the umbrella covering a list of HR policies and agreements.

As per India’s employment laws, it is essential to file proper documentation of the

employees to ensure appropriate navigation through the complex and diverse employment
framework.

Therefore, having accurate and updated documents that prove the employee’s compliance to
the company will help in the long term and save them from any legal hassles later. Therefore,
you need to follow the labour and wage laws while processing documentation.

2. Employee wages

Employee payroll is one of the significant aspects of employee management. The job of the
HR department of the company is to manage the employee payroll effectively. This includes
offering competitive salaries to employees and staying in compliance with the government
policies.

Various acts passed by the government cover the employee wages. The most prominent
among being The Minimum Wage Act, 1948. This act sets a particular wage as the minimum
wage for skilled as well as unskilled workers. The act mandates that the employees earn the
‘Basic’ salary to meet their living expenses.

Further, The Payment of Wages Act, 1936 states that an employee should receive their
rightful monthly salary payment on the agreed-upon date without any unwanted deductions.
Therefore, companies need to follow the laws to remain compliant while being competitive.
This is one of the most critical points in the list of HR policies in India.

3. Code of Conduct

The Code of Conduct is the company’s policies, consisting of its vision, mission, and ethics.
This is created to inform employees about the policies of the behaviour and maintain
discipline while at the workplace.

The code of conduct is among the types of HR policies containing the company’s rules that
employees need to adhere to. The policy includes dress code, equal rights to all, electronic
usage policy, conflict of interest, media policy, proper work environment etc. It also contains
the rules and penalties if an employee breaches or violates the code of conduct.

4. Leave policy

As per requirement, every company should have a good leave policy to provide a clear
picture of the leaves they would be entitled to take in a year. The policy should include a
proper bifurcation of the leaves into paid leaves, sick leaves or casual leaves etc. It must also
mention public holidays.
HR policies in India 2023 should also provide provision for unpaid leaves along with detailed
rules on the salary cut on late arrivals and half days. According to The Factories Act, 1948,
employees are entitled to get paid holidays every week as well as get paid for any extra work
they did beyond their work hours.

5. Employee provident fun

Every employer is liable to set up an employees provident fund account for each of its
employees. The Employees Provident Fund Act, 1947 provides income security to the
employees after their retirement. This is more like a security fund offering various benefits
for employees, such as housing care, medical insurance and retirement pension.

It is important to note that companies exceeding 10 employees must provide provident fund
benefits to their employees. Therefore, if you have more than 10 employees, then you are
liable to have a provident fund scheme for your employees.

6. Gratuity Policy

The gratuity policy is a way for companies to appreciate the services provided by their
employees towards the company. The gratuity policy applies to all employees who have
provided more than 5 years of continuous service to the organisation.

The company is liable to pay a one-time payment as gratuity payout to employees who are
either being laid off or resigning, but have provided 5 years or more of continuous service.
This is vital to keeping employees happy and engaged. Moreover, companies are legally
bound, as per The Payment of Gratuity Act, 1972, to pay gratuity to their employees.

7. Paternity and maternity leave policy

Every company with more than 10 employees is required by law to provide maternity leave
benefits to women employees as per The Maternity Benefits (Amendment) Act, 2017. Any
woman who has worked with the company for 80 days is entitled to receive the benefits.

According to the act, a pregnant working woman is eligible to get a minimum of 26 weeks of
paid leave for the first 2 children and a subsequent 12 weeks of unpaid leave.

As of now, there is no law on paternity bills for private company employees. The central
government employees are entitled to get paternity leave of 15 days to take care of their wife
and surviving child. There is a proposed paternity benefits bill, 2017, which is still pending
government authorisation.

8. Sexual harassment workplace policy

A company is required to take or implement decisive rules, human resource policies and
regulations to create a safe work ecosystem for women at the workplace. This is not just
required by law, but it should be a moral necessity for the company.

According to The Sexual Harassment Act, 2013, the company must implement proper steps
to protect women employees and interns as well as any woman who visits the company.
Moreover, every company should have a sound sexual harassment policy to address
harassment complaints by women employees actively.

This includes setting up an Internal Complaints Committee in every company crossing the
10-employee mark to look into the sexual harassment complaints by women at the workplace.

9. Adaptive work culture policy

The past year has seen a paradigm shift in various companies’ work culture. The pandemic
has forced many of them to ask their employees to work from home. This has given rise to
the need for an adaptive work culture policy to provide greater flexibility to employees to
choose their work location or workplace.

The adaptive work culture policy should contain proper rules and structures to manage
employees working remotely or working from home. This will create a framework or
guidelines for employees to follow when working from different locations.

10. Employment Termination policy

Every employer has to face it. Some of your employees may plan to move ahead at some
point in their careers. You may also feel that an employee no more fits into your larger
scheme of things. These moments are emotional for the employee as well as the employer.

Therefore, the employer needs to ensure that they implement a proper leave policy that lays
down the steps for an employee who wishes to leave the company.

This will help the HR team follow the correct procedures as per the labour laws to terminate
an employee or process the employee’s resignation request.

HR policies are an essential framework that every company needs to ensure smooth
functioning. These policies are the guiding factor that tells the company and the employees
how to work and conduct themselves to ensure a safe and secure working environment for all.

HR Audit
March 17, 2021 by Anjali J Leave a Comment

Definition: HR Audit or Human Resource Audit is a process of examining the efficiency of

the human resource divisions of the company to help them in assessing their current
position. It is very much similar to the financial audit procedure. To understand its HR
policies, the company does the human resource audit so that a clear picture of its practices
comes out, which helps the company analyze what has been achieved and what needs to be
achieved by the company.

Inherently, a human resource audit contains an organized analysis of all the accounting
policies and practices of the business, which becomes a tool for the company to manage its
competitive edges by improving effectiveness and efficiency. The aim of conducting this
audit is to acknowledge the strength and weaknesses of the human resource functions of the
company.

Content: HR Audit

1. Elements
2. Process
3. Need
4. Benefits
5. Obstacles
6. Conclusion

Elements of HR Audit

Human resource audit becomes efficient when the following points are taken care of:

 HR audit should be done thoroughly and should comprise all human-related functions.
 The company needs to hire an expert for the human resource audit.
 The outcomes of the audit should be shared with all the staff of the company.
 The company needs to determine and follow the uniformity of the human resource audit
depending upon its business plans and growth cycle.

Process of HR Audit

The following procedure will be followed for the audit of human resources:

 Step 1- The first step should be an examination of the company’s nature, whether it is a
professional’s enterprise or a general business enterprise; then,
 Step 2- Conduct a conference with the top managerial cadre to collect information and facts
related to human resource assessment. An adequate provision should be made for the
depreciation of human assets.
 Step 3- The company’s balance sheet should be thoroughly checked whether the correct
values are placed or not.
 Step 4- Thereafter, an Internal control system of the company should be inspected with
respect to the facts of the human resources for examining its efficiency.
 Step 5 –At the time of value assessment of human resources, all the contingencies should be
considered, which may impact the valuation.

Need for HR Audit

To make the show interesting and increase the effectiveness of the company, management
found the solution incompetent workforce. HR development functions should be performed
as per the planning and expected results. To ensure and not to take the chance, the company
undertake human resource department audit due to the following reasons:
1. Employee Participation and Identification

A change has taken place in managerial philosophy. The management now feels the
employee’s participation in the activities of the company and their identification with its
essential for the successful making of the company.

2. Feedback

As a company grows, constant feedback is required to enhance the conduct of its personnel. It
becomes much easier with the help of a human resource audit as it provides required
feedback. Especially, diversified and decentralized companies need feedback more
essentially.
3. Meet the Challenges of Trade Union

Trade unions have become more powerful and are playing a more active role in human
resource management. They often question management’s competent in industrial relations.
Management can meet this challenge through the HR audit.

4. Rising Labour Costs and Increasing Opportunities

Human resource audit is becoming necessary due to rising labour cost and increasing
opportunities for competitive advantage in human resource management.

5. Protect Employee Interest

HR audit helps in refraining from the interventions caused by the government for protecting
the employees’ interest.

6. To Tackle the Problems Related to Women Employees

The growing proportion of technical, professional and women employees create more
complicated problems in human resource management. An HR audit is required to tackle
these problems.

Obstacles of Human Resource Audit

The auditor needs to intimately connect with the assessment of the human resource, although
he is not a master of human resource valuation. For which he has to calculate the values
entered in the balance sheet as a net value of human assets. However, there are various
hurdles that the auditor has to face while assessing the value of human resources. These
obstacles are explained below:

 Discovering the exact value of an individual is not desirable. Thus, the procedure of audit
under human resource audit is obliged to give impractical approach.
 It’s challenging for the auditor to judge the personnel’s value which has qualified the process
proposed by the valuers.
 There is a possibility of biased appraisal in an examination of resources. Thus, the procedure
of audit cannot assure the authenticity of the information.
 The auditor faces various hurdles in gathering the requisite data on which the HR valuation
has been established.
 As HR audit is not a very famous concept and is followed by very few companies, the auditor
may find difficulties for the purpose of audit.

Benefits of Human Resource Audit

The HR Audit provides the following benefits to the company:

 Human resource audit helps in arranging the provable information about the human
resource functions of the company.
 It simplifies the duties and responsibilities of the personnel of the HR department.
 HR audit provides aid in recognizing crucial HR dilemmas.
 It helps in aligning human resource strategies with managerial strategies.
  Human resource audit enhances the prominence of the HR functions of the company.
 It helps in shortening the HR cost of the company.

Conclusion

HR Audit is involved with the human assets of the company that emerges in the balance sheet
by way of checking, investigating and assessing the diversified data and values based on the
approximated figures of the human resources.

Concepts Behind Industrial Relations

Industrial relations imply the relation between both employer and employees during
the period of employment in an industrial organisation. However, the concept of
industrial relations has a broader meaning. In a broader sense, the term industrial
relations refers to the relation between various unions, state and union, and between
employers and government. Relations of all those associated with the industry may be
known as industrial relations.

According to the International Labour Organisation (ILO), industrial relations deals

with relationships between either state and employers and workers organisations or
the relationship between the occupation organisation themselves.

Industrial Relation Meaning

The term industrial relations comprises two words, i.e. ‘industry’ and ‘relations’. The
term ‘industry’ refers to any productive activity in the organisation in which the
employees are engaged. On the other hand, the term ‘relations’ refers to the
relationship, which exists within the industry between the management and the
employees. The relationship between management and employees within the
organisation within the organisational settings is defined by industrial relations.
Industrial relations emerge directly or indirectly from management-trade union
relationships.

Characteristics of Industrial Relation

Following are the significant features of industrial relations:
Industrial relations are the result of employment relationships in industrial
enterprises.
Industrial relations introduced the concept and method of balancing and
cooperating
Industrial relations formulate rules and regulations to maintain harmonious
relations.
 The intervention of the Government to shape the industrial relation is made
through laws, agreements, rules, charters, etc.
Industrial relations incorporate both individual relations and collective
relations.
Several parties play a role in industrial relations. The main parties are
employees and their organisation, employers and their association, and
government.

Objectives of Industrial Relation

Following are the different objectives of industrial relation.”
To establish industrial peace.
To safeguard the interests of both workers and management.
To avoid industrial disputes.
To raise the production capacity.
To establish industrial democracy.
To minimise the labour turnover rate and absenteeism.
To safeguard the workers economic and social interests.
To contribute to the economic development of the country through
productivity.
To establish a full employment situation.
To minimise strikes, lockout, Heroes, etc., by providing good working
conditions and fair wages to the workers.

Nature of Industrial Relation

Industrial relations are concerned with the relationship between management
and workers.
Industrial relations safeguards the interest of employees.
Industrial relations are concerned with the system, rules, and procedures used
by unions and employees to determine the reward for effort and other
conditions of employment, safeguard the interests of the employees and their
employer and regulate how employers treat their employees.
 Industrial relations maintain a balance with employee expectations, employer
associations, trade unions, and other social and economic institutions of
societies.
Industrial relations help in resolving disputes, conflicts, and controversies
between labour and management.

Scope of Industrial Relation

Industrial Relations is a wide-reaching term. Different scholars have expressed their
different views on the scope of industrial relations. According to Dale Yoder,
“Industrial relations incorporate policies related to recruitment, selection, training of
workers, personnel management, and collective bargaining.” According to the
International Labour Organisation (ILO), industrial relations incorporate the relations
between state and employers and relations between trade unions and employers
associations.

According to Richard A Lester, the scope of industrial relations is no longer limited

only to trade unions and industrial management, rather it includes all aspects of labour
such as wages, productivity, social security, management, and employee policies.
Trade Union policies also form part of it.

In a modern organisation, the industrial relations functions are performed by the

Industrial Relations Department. This function is performed under the supervision of
the Director of the Industrial Relations department. In the performance of this
function, support is rendered by different managers and subordinates. Different
important functions performed by workers of the industrial relation department
includes:
Management of policies and programs of industrial relations.
Public Relation
Labour Relation
Recruitment, Selection, and Placement of labourers
To provide medical and health-related services.
To maintain employment records of the employees.
Provision of recruitment test, ability test, skill test, and intelligence test.
Provision of training and education program.

What is the Importance of Industrial Relations?

Promotes Democracy: Industrial relations means employing collective
bargaining to resolve issues faced by workers. This collective bargaining is
 generally employed through cooperation and mutual agreement amongst all the
affected parties, i.e., democracy, management, and employees unions. This
enables an organisation to establish industrial democracy, which eventually
motivates the workers to perform their best to the growth and prosperity of the
organisation.
High Morale: Good industrial relations enhance the morale of the employees
and motivate the workers to work more efficiently.
Avoid Conflicts Between Management And Union: Industrial relations
minimise issues between unions and management. This is because industrial
relations incorporate setting up machinery to resolve issues faced by
management and employees through mutual agreement to which both these
parties are bound. This results in ignoring any unfair practices that could lead
to major conflicts between employers and trade unions.
Minimises Wastage: Satisfactory Industrial relations are maintained on the
basis of co-operation and recognition of each other in the department. It helps
to minimise wastage of material, manpower, and costs.
Economic Growth And Development: Good and harmonious industrial
relations result in increased efficiency and hence prosperity, which in turn
minimise turnover and other tangible benefits to the organisation. This
promotes economic growth and development.

Functions of Industrial Relations

The important functions of industrial relations are:
To establish communication between workers and management to maintain the
sound relationship between the two.
To establish support between managers and employees.
To ensure the creative contribution of trade unions to avoid industrial conflicts.
To safeguard the interests of workers and the management,
To avoid an unhealthy and unethical atmosphere in an industry.
To formulate such considerations that may promote understanding, creativity,
and cooperativeness to enhance industrial productivity.
To ensure better workers’ participation.