Take the time to audit your human resources practices

Given the everyday demands of a human resources department, and those of us who deliver HR services, it is easy to neglect to review internal processes and systems to ensure compliance with state and federal laws that govern HR practices — as well as the effectiveness of those practices when measured alongside the corporate structure, culture and business plan.

However, it is important to take the time necessary to perform an HR “audit” and to determine what areas, if any, have the potential for legal liability or otherwise need attention.

The components of such an examination are many, but can be performed in small “chunks” to make the process manageable.

Among the areas HR professionals and staff may want to focus on include a review of your employment application at least annually will ensure you are obtaining all the information you need and may legally request, and that you are not asking for unnecessary information or information that will not be used. And, as important as obtaining an accurate work history for a potential employee is, it also is important that the application contain certifications and authorizations by the candidate which will allow you as the potential employer to perform a thorough background check.

The application should contain the candidate’s certification that all information being provided is true and accurate and his or her understanding that any omission or misrepresentation will be grounds for discharge. The application also should contain an authorization that allows the hiring organization to verify all information and releases the hiring organization and previous employers from any liability as a result of that process.

Finally, the application should state any other criteria that may be required for the position (post-offer drug test, for example) and should indicate that if the candidate is offered a position, he or she will be an at-will employee.

Many organizations have decentralized the interviewing and selection process, with functional managers performing the screening, interviewing and selection for their departments. While this may make sense for a large company with several locations, a high turnover and the need to fill positions quickly, it is important to ensure that the individuals performing these functions have been thoroughly trained on appropriate interviewing protocols and the nuances of interviewing.

In addition, a helpful tool that HR may provide might be a basic applicant interview record to ensure that questions are being asked consistently, even though candidates’ responses may inevitably lead to more and varied follow-up questions.

Interviewers also need to be sensitive to the “notes” from these interviews, as they may be utilized later in cases of claimed discrimination in hiring practices.

Reference and background checks are most often performed by the HR department, since HR staff members are trained in soliciting the appropriate information in a manner that is consistent and equitable.

A review of your company’s standard offer letter and rejection practices also is worthwhile. These are often areas in which mistakes are made that can lead to liability in the future. Be sure the offer letter indicates the position, its classification, start date, rate of pay and frequency and pay date. If the offer is conditional, the specifics should be clearly indicated.

Performance management

Do employees receive regular and timely feedback regarding their performance? Often we are quick to document a policy infraction or performance issue, but fail to take the time necessary to conduct an annual performance review.

If your organization simply provides across-the-board COLA increases, perhaps a performance evaluation is not necessary. However, to the extent that performance appraisals are to be conducted, does your company have managers who are always late with this process? Are there obstacles (other than volume) to a timely performance review process? Do you use a focal review process or one based on the employee’s anniversary date? There are advantages and disadvantages to both, and your company’s budget process may be helpful in determining what may work best for your organization.

Personnel files

Personnel files also should be maintained in a manner that complies with state and federal law, and a random check of these files is always helpful.

Personnel files should contain such information as: resumes and applications; offer letters; job descriptions, performance evaluations; benefit enrollment forms; payroll change notices and/or documentation related to personnel actions; documents regarding performance issues; and employee handbook acknowledgements.

Information such as Form I-9, medical information (related to a medical leave of absence or Family and Medical Leave Act leave), and workers’ compensation information should not be kept in the employee’s personnel file.

In a future article, I’ll discuss wage and hour practices, retirement plans, employee handbooks and employee separations.

Dana Scott, a human resources and employee benefits consultant with the Concord-based law firm of Gallagher, Callahan & Gartrell, provides HR services to employers in a broad range of industries throughout New England.

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