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How to Setup HR Department


This article will brief about how to set up new HR department and review the company’s practices/policies, if any. Summarize all HR activities that are performed.

  • Review personnel files of each employee
  • Check for all the legally required documentation
  • Review all policies and procedures are in place and up to date.
  • Employee handbook Do you have the right language in it? Have you inadvertently created a contract between you and your employees?
  • Do you have policies dealing with sexual harassment, workers’ compensation, safety, benefits, discipline, etc.?
  • Are you in compliance with state regulations?
  • Do you have a working knowledge of the law? Do you have all the required postings, forms, and documentation required by the respective governmental agencies? Are all the managers aware of their legal responsibilities and liabilities?
  • Are you recruiting and selecting the right people? Are you aware of the talent and skills needed to move your organization forward? Do you know where to find these people? Are you recruiting in a cost effective manner? Are your managers trained in interviewing techniques?
  • What kind of compensation plan do you have? Is it meeting the organization’s needs? Is it motivating your employees? Is it competitive and fair?
  • How about your benefits? Are you getting the best coverage for your people at a price the employees and the organization can afford? Is your total compensation attractive enough to retain existing people and be an incentive to new people?
  • What’s it like working at your company? Are people productive and motivated? Are you looking at the indicators of a productive and motivated workforce (absenteeism, tardiness, turnover, grievances, high workers ‘compensation rates, poor quality, missed deliveries, and poor productivity)?
  • What about your training? Are manager’s and employee’s skills current? Is training a “way-of-life”? Are you growing your people or do you have to go to the outside every time you need someone with a specialization? Are supervisors effectively managing their employees?
  • Are managers and employees kept informed? Do they know what’s going on? Is the grapevine the main source of communication? What are the sources of communication?


As you begin the process, get some professional help, whether through networking with peers, other organizations, or outside expertise. It is a big task, but one that is critical to the organization.

 To Establish   HR Dept


The first step is to determine what the expectations are of the organization.


After that, determine the compliance issues which pertain to your company. The most basic of these have to do with wages and hours of work, classification of employees, leaves of absence including maternity leaves, harassment, and others.


Then, determine whether or not you need to have an employee handbook or other formal policies and procedures manual to cover everything from establishing the company as an at-will employer to benefits. If a handbook already exists, be certain that it is in compliance with state regulations and that the policies and the way they are written are in the best interests of the company.


Are all the basic policies included? These can be thought of as grouped into conditions of employment, benefits, and disciplinary processes. Is there a balance between stated corporate and employee rights and obligations?


Take a look at existing employee files or, if no files exist, gathering all the papers into coherent personnel files. Minimally, you should have an Application for Employment form or resume, any insurance forms that the employee may have signed, and performance appraisals.


Who takes care of payroll? There used to be an ongoing fight between HR and accounting as to who gets payroll. So make sure of this point to have a clear picture on this.


One person should be responsible for new employee orientation. In order to inform new employees of their benefits and the policies of the company, you will very simply have to be the expert in benefits and policies of the company.


HR has an information function that you should think through. Changes in policies, changes in benefits, even changes in laws must be communicated to all employees. Major changes may call for training such as in harassment a few years back. Therefore, HR becomes a kind of pass-through in the information cycle.

1) Recruitment and selection (job descriptions, selection tools, background checks, offers)


2) Compensation (i.e. methods, consistency, market)


3) Employee relations (labor agreements, performance management, disciplinary procedures, and employee recognition)


4) Mandated benefits (social security, , worker’s compensation, )


5) Optional group benefits (insurance, time off benefits, flexible benefits, retirement plans, employee assistance programs, perks)


6) Payroll (i.e. internal vs. external options, compliance)


7) Recordkeeping (HRIS, personnel files, confidential records, other forms)


8) Training and development (new employee orientation, staff development, technical and safety, leadership, tuition reimbursement, career planning)


9) Employee communications (handbook, newsletter, recognition programs, announcements, electronic communication)


10) Internal communications (policies and procedures, management development, management reporting)


Once you have carefully evaluated each of these areas, you are ready to put together your strategic Human Resources business plan. This will help you map out exactly what you need to do and how it impacts the bottom line, plus when you will need to do it.



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