16 Essential HR Documents and Tools for Every Business
Businesses rely on various departments to operate successfully. One crucial department is human resources, or HR, which is responsible for managing employees. Learning about the tools and documents required for this department may help you create and oversee this type of department effectively.
In this article, we discuss the human resource department of a business, list essential HR documents and tools for all businesses and explain how to build an HR department.
What is a human resources department?
A human resources (HR) department manages a company's employees, including recruiting, terminating, training and completing all employment-related paperwork. It often performs tasks like reviewing resumes and applications, scheduling and conducting interviews, hiring and onboarding employees, maintaining employee files and overseeing the company's fair employment practices and workplace safety. They also arrange company benefits policies, such as health and life insurance, retirement accounts, payroll and vacation time.
Duties performed by the human resources department include:
Recruitment: Employee recruitment includes determining when recruitment is necessary for each department, posting job descriptions, interviewing and selecting new hires.
Onboarding: The HR department also develops orientation schedules for newly hired employees and plans and schedules processes for them and assists with gathering and completing new hire paperwork.
Employee assistance: Human resources may also create and implement helpful programs for employees, including personal leave, childcare, incentives for outstanding performance and flexible schedules.
Employee benefits: This department informs employees about news and updates regarding life, medical or retirement benefits, answer questions and help with applications or claim forms.
Mediation: HR employees often act as an intermediary for communication between employees and each other or their manages to facilitate discussions, clarify communication and resolve conflicts fairly.
Training and development: This department is often in charge of arranging training sessions, classes or courses periodically to ensure they inform and train all staff in things like first aid, new software and new methodologies in the field.
Employee data privacy: Highly confidential information, such as employee contracts, job descriptions and responsibilities, discipline records, attendance records, performance records and IRS documents, are all under the care of the human resources department.
Legal compliance: The department enforces labor laws, informs employees about local and federal laws and ensures the company complies with all laws to protect the interests, image and success of the company.
16 important HR documents
HR documentation is essential for a well-functioning HR department and overall organization. These documents are important for providing proof of conversations or actions, legitimizing various activities, explaining processes and informing employees. These documents are also helpful for ensuring proper organization.
Here are some examples of essential HR documents for any organization, regardless of type and size:
1. Job descriptions
Job descriptions are essential for explaining the exact duties of different employees. They may include information about the position's key responsibilities, compensation, direct manager and requirements. Descriptions are helpful when recruiting new people and evaluating an employee's performance.
2. Organization chart
An organization chart illustrates the company's employee structure. It shows how different jobs relate to each other and who is responsible for managing different people in the organization. It may be helpful internally if employees have questions and be a useful resource for interested parties hoping to understand the company's hierarchy.
3. Staffing plan
A staffing plan is essential for helping an HR department understand its current employees and plan for future staffing needs. It involves evaluating the current skill sets within an organization, identifying gaps and comparing these with the company's goals. This allows the HR employees to determine what types of employees they may need to hire and prioritize recruiting efforts.
4. Employee handbook
Organizations typically distribute an employee handbook to all employees upon hire. These handbooks act as a centralized resource for employees to understand the company's policies, expectations, benefits and processes. They may include copies of other important HR documents within them, such as attendance policies or company culture information.
5. Compliance documents
Compliance documents include the various records and employee data related to laws and legal regulations. This may include information about payroll, benefits, compensation, taxes, insurance and similar concerns. As this information is generally confidential, it may be helpful to organize these documents by employee.
6. Performance metrics and documents
Performance metrics help establish expectations for employees and provide structure for reviewing and disciplining employees. These documents may complement job descriptions and include an explanation of the evaluation process, discipline processes and copies of letters managers may send. For example, an HR department may provide a template of a warning letter to send to an employee who violated a policy.
7. Time and attendance policy
It's essential for an HR department to establish and share the company's time and attendance policy. This documents explains the standard working hours, expectations for employees to work and the repercussions of violating the rules. It may also explain how employees can track their time and attendance with the organization.
8. Exit documents
Just as the HR department helps welcome new people to the organization, they're responsible for processing people leaving. These documents may relate to the expectations for when an employee gives their notice, templates for letters of recommendation or exit interview information. They also relate to termination, such as policies for what employees receive upon termination or templates for termination notice letters.
9. Compensation and benefits overview
The HR department maintains records regarding the compensation and benefits employees receive from the company. Compensation-related documents may include salary structure information for different employees, official processes for raises and explanations about how pay periods work. Benefits information may outline the benefits the company provides and when employees become eligible to receive them.
10. Recruiting documents
Recruiting documents help the HR department plan for and complete recruiting efforts efficiently. These documents may include templates for offer letters, interviewing materials, guides for checking references and policies for hiring employees. It may also be useful to create an organizational system that clearly demonstrates a candidate's progress through the recruiting process.
11. Company values
It's essential for HR to have copies of information about the company. For example, it may have documents about the company's history, mission, values and vision. Employees benefit from having access to this information by knowing more about the company and how to act to ensure they align with the company's overall culture and goals.
12. Expense tracking
Some companies allow employees to report expenses so the company can reimburse them. It's crucial for the HR department to explain who qualifies for this and what the criteria is for reimbursement. The documents may also outline how employees can submit the expenses and how they can expect to receive their repayment.
13. Dress code policy
Establishing a dress code is often important for organizations. This policy helps the company create and present a specific image to the public, so it's important to be specific about what is and isn't acceptable work attire. Be sure to include information about the consequences of violating the policy or what accommodations may be available to employees.
14. Onboarding documents
Onboarding documents include all paperwork and information that the HR department requires new employees to provide. It may include an onboarding checklist, a new hire checklist, an outline of the onboarding process and copies of company policies for the employee to review. Some documents also concern the entire organization, such as templates for announcing and introducing the new person to the organization.
15. Training and development
It's important for the HR department to plan its training and development efforts. These documents may establish expectations for employees to complete relevant training, outline how to request a speaker or set goals for professional development. It may also be useful to have documents explaining whether the organization reimburses employees for additional training they pursue, such as through a tuition reimbursement program.
The HR department may create and update a variety of different contracts. It may also collaborate with lawyers to ensure the legality of these agreements. Common contracts or templates they keep include new hire contracts and contracts for freelance workers.
Tools for human resources
The human resources department typically handles a lot of information and diverse tasks. Various technological tools may help make these tasks more manageable and efficient to complete. Some helpful HR tools include:
Human resources information systems
Most departments use comprehensive human resources information systems (HRIS) to help them manage and organize the information they're responsible for and ensure it remains confidential. This software stores data like employee records and documentation, tracks vacation and personal time, manages employee benefits, files performance evaluations and accesses payroll records. It may also aggregate data and create comprehensive reports for auditing purposes.
Read more: What Is an HRIS? A Definitive Guide
Recruiting software is used to streamline the process of acquiring new staff. Using the software, individuals in HR can post job ads, collect applications, manage candidates and more. These software solutions save time and eliminate the need to track all of this information manually.
Although managers are often responsible for evaluating their employees' performance, the HR department may assist them. For example, an HR employee may develop a set of objectives and milestones that they track over time. They may provide managers with information and tools to help monitor employees' progress throughout this period and thus revisit and readjust future goals.
While structures vary by organization, payroll is typically the responsibility of the HR department. The department may choose to use a service to help streamline this process. Payroll services automatically calculate and process paychecks, hours, deductions, paid time off and tax forms.
Read more: FAQ: What Is a Payroll Service?
Benefits management platforms
Benefits management platforms provide similar benefits to payroll services, but they often address more. They may administer and track benefits, manage retirement and insurance plans and provide centralized information about or access to other benefits the companies offer. For example, it may include information about worker's compensation insurance or discounts the company provides.
Employee engagement tools
Employee engagement tools help you monitor company culture, allowing you to recognize and reward staff. They often let you collect anonymous feedback from employees that you can later refer to when developing improvements to your culture and operations. These tools may help employees feel more valued, especially knowing members of management receive and review their honest feedback.
How to build a human resources department
It's important for an HR department to support and reflect the company's desired culture. Follow these steps to build an HR department that aligns with the company's needs:
1. Create the culture
Define what you want the company culture and values to look like by clearly identifying why the company exists, what it believes in and what you envision for the company's future. You may ask yourself why qualified people might choose to work for you rather than with another company.
2. Balance personality with competence
It's essential for the person or people you hire to form your HR team to understand the desired culture and even blend into it while remaining consummately professional. This unique blend is necessary to recruit employees who may fit well into the culture and bring the necessary experience and skills to the position. This may help you achieve the desired workplace culture.
3. Clearly identify what you expect from an HR department
HR departments are responsible for administrative tasks and people-focused tasks. And while it may be possible to find one person who can do all of these things well, it may be better to hire different people for different specialties.
For example, you may have a team with someone who focuses on compliance, procedures and administration and someone else who focuses on recruiting, retention and training. No matter their daily duties, each person on the HR team benefits from possessing strong communication skills, a sense of fairness, diplomacy and clear ethics.
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