Key corporate HR policies – how to build them effectively

HR policy is always an important factor that contributes to a competitive advantage and attracts talent during the recruitment process. Each business will have a different policy depending on its size and organizational structure. So, what is an HR policy in a business, and which employee management policy is suitable for every business? Let’s explore the answer with 1Office in the article below.

I- General Overview of HR Policies

1. What is an HR policy?

A company’s HR policy is a system of official rules and guidelines that a business establishes to manage its employees. It plays a crucial role in promoting fairness and consistency within an organization, as well as helping to protect the organization from legal claims.

On the other hand, HR procedures are step-by-step instructions that outline the actions to be taken to comply with these policies. Evidently, defining these policies and procedures is one of the core functions of human resource management.

2. The Purpose of a Human Resources Policy

Currently, HR management policies play an important role in every organization by helping to establish a code of conduct and rules for each employee. In addition to protecting your organization from legal claims, HR management policies also play a significant role in promoting culture, fairness, and inclusion.

Here are some of the major benefits of an HR policy:

• Provides legal protection for your company.
• Clearly and transparently communicates employment conditions.
• Sets employee expectations regarding their career development.
• Helps resolve employee disputes and conflicts.
• Accelerates the decision-making process on various HR issues.
• Ensures all employees are treated equally and fairly.
• Creates a safe and healthy work environment.

II – Important HR Policies in a Business

Each organization will have different HR management policies depending on its location and industry. Below are the essential HR policies that every business needs to establish.

1. Recruitment Policy

This policy helps businesses set criteria for selecting candidates and outlines the onboarding process for new employees. This policy is divided into 3 sub-policies: hiring policy, employee training policy, and employee termination policy. This policy will cover the basic activities of an employee from the time they join the company until they leave.

• Recruitment Policy

This policy serves to establish the criteria and requirements for each position that needs to be filled. In the job posting stage, HR needs to clearly describe the job requirements and responsibilities and screen for suitable resumes. Afterward, they analyze and evaluate potential candidates to make an interview decision.

• New Employee Orientation Policy

As part of the new employee onboarding process, the new employee integration policy includes criteria on culture, ideology, and the suitable candidates selected for the company. Orienting new employees from the beginning helps them better understand the company’s internal culture, which departments exist, and where they fit within the company’s structure. This helps them understand their impact on the organization’s overall work.

• Probationary Policy

This is a crucial policy in the recruitment process that helps the business establish evaluation criteria and assess personnel during their probationary period at the company. This helps determine whether the employee has the capability to meet the job standards and requirements.

• Temporary Replacement Policy

In cases where the business experiences a personnel shortage for various reasons and cannot find an immediate replacement, the company needs to devise a solution to continue the work, such as assigning additional tasks to other employees to ensure the work continues.

2. Personnel Training Policy

Training and developing human resources is one of the top priorities for any business. If a company neglects personnel training and development, it can stagnate the organization’s growth and reduce employee performance. Below are some key components of a personnel training and development policy:

Training Cost Policy

Financial forecasting helps the CEO understand how much to spend on training and whether the company’s budget is sufficient to cover the training sessions. Next, the business needs to create a plan that includes: location, content, training format, etc., as well as the expectations for personnel after completing the training.

Training Scale

Depending on the needs of each organization, internal training classes can be held for different numbers of employees. The business can choose between online or offline training formats depending on the purpose and content to reduce costs.

Scheduling Training Sessions

To achieve the best training effectiveness, the business needs a specific and clear personnel training process for the sessions. The schedule must be suitable for everyone to absorb knowledge most effectively.

Evaluating Training Results

In the final step, the business needs to evaluate and check the quality of the training to assess employee progress or conduct retraining if the desired results are not achieved.

See also: Sample Personnel Training Policy for Businesses

3. Compensation and Salary Policy

This policy involves agreements and cooperation between employees and management to ensure the best possible benefits and quality of life for employees. Therefore, the business must be clear from the outset about payment frequency, payment methods, policies for converting net to gross salary, etc., while also listing the additional benefits your company provides, such as medical benefits, healthcare programs, bonuses, allowances, and so on.

Salary and Bonus Policy

This is a top concern for employees. A suitable salary and bonus policy helps ensure employees’ livelihoods while balancing the company’s finances. A salary policy needs to ensure the following 3 key elements:

– Payment frequency

– Employee benefits

– Payment method

Holiday and leave policy

Besides salary and bonuses, this is one of the policies that candidates are extremely interested in. The number of leave days may vary depending on the business model, but public holiday policies are largely the same for both private and state-owned enterprises.

Company trips and vacations

With the fierce competition in today’s market, attracting personnel with vacations and trips creates an irresistible appeal. If a business regularly organizes vacations and team-building activities, it will help staff bond more and build a strong corporate culture.

Retirement policy

According to Vietnamese law, there is a proposal to raise the retirement age to 62 for men and 60 for women. However, the current law sets the retirement age at 60 for men and 55 for women. Therefore, each company will have different retirement support policies, such as insurance, stock grants, certificates of merit, or a bonus to motivate employees to fully dedicate themselves to the business.

4. Health and safety policy for personnel

Among human resource management policies, the health policy needs to be systematically and comprehensively developed by the business. This policy requires employers to have specific safety regulations as well as regular healthcare plans for employees.

In addition to these legal requirements, you should include emergency and safety procedures in your employee handbook. You should also detail the steps employees must take if a workplace injury occurs and mention the expectation that all work-related accidents are reported.

5. Payment and timekeeping policy

The timekeeping and payroll policy emphasizes the importance of accurately tracking work hours and the proper procedures for recording them. You can also include a payday policy that informs employees about important details related to their compensation, such as:

• The proper protocol for when payday falls on a holiday.
• Payment methods.
• Frequency of paydays.

6. Confidentiality policy

Confidentiality policies communicate specific topics that employees must keep private. Provide examples of confidential information, employee obligations, and the consequences of violating the organization’s confidentiality policy.

7. Job classification policy

There are several classifications for employees that can affect their eligibility for employee benefits. For example, part-time employees are often not eligible for healthcare benefits through their employer. You should clearly define these classifications in your employee handbook.

III- How to build effective human resource management policies

To have a complete and highly effective human resource management policy, you need to create content for each different policy template. Currently, most businesses have their own internal HR policy templates; however, to build effective HR policies within the company, you need to pay attention to the following content:

• Policy name
• Effective date of the policy (and the date of any revisions or updates)
• Name of the person responsible for updating the policy and answering questions about it
• Purpose of the policy
• Definitions of special terms used in the policy
• Main policy statement
• Scope and applicability (including any permitted exceptions)

To effectively achieve these objectives, HR policies need to be searchable and discoverable by personnel. Therefore, businesses should include human resource management policies in your employee handbook or on the company’s intranet portal to share with the entire team.

IV- Policies to Help Businesses Attract and Retain Talented Employees

The increasingly open job market has led to a trend of employees job-hopping more frequently to find a suitable environment. Therefore, attracting and retaining talent is a crucial part of HR policy. So, how can you retain talented employees and encourage them to stay with your business for the long term? Let’s explore some HR management policies below that can help you retain talented employees effectively and quickly.

1. Create a Consistent Message to Enhance Your Brand

Your business began with a vision. By defining the values that drive this vision, create a message for your business—its unique “why”. Your message should communicate what your business stands for and how it represents itself.

By creating a well-known and consistently expressed message, candidates who align with your business values and purpose will be more likely to apply for your open positions.

2. Treat Employees with Respect

When you respect your employees, you honor their contributions and voices, while promoting their individual differences, talents, and interests. Without respect, employees may become less motivated, and commitment and innovation will suffer. By recognizing employees and including them in company decisions, their effort and commitment will be higher. This positive morale will shine through and help you attract new employees who want to feel valued.

3. Build a Good Compensation and Benefits Policy

A good salary and benefits package is one of the top factors that attract candidates. Therefore, a business with a clear salary and bonus policy based on competency, level, and seniority will be preferred by candidates. Conversely, if a business doesn’t know how to properly review salaries and bonuses based on performance, it will be very difficult to retain talent and will leave a negative impression on the recruitment market.

Currently, to build and apply HR policies in the best way, using technology is a solution that helps managers save maximum time and effort. Among them, one of the most comprehensive human resource management platforms is the HR management software from 1Office. This is a useful solution that supports businesses with all issues related to HR operations, including:

V. Common Mistakes When Businesses Build HR Policies

In the process of building an HR policy system, many businesses—especially small and medium-sized enterprises—often make common mistakes that render policies ineffective, difficult to implement, or counterproductive for their staff.
Below are common errors with detailed analysis to help you identify and rectify them early.

1. Lack of Alignment Between Policy and Business Strategy

A major mistake is creating HR policies that are disconnected from the overall development strategy.
For example: A company aims for global expansion, but its HR policy still focuses only on domestic employees, lacking mechanisms to attract international talent or support remote work.
This causes the human resources to lag behind strategic goals, leading to delays and reduced competitiveness.

How to fix: Before issuing a policy, analyze the business strategy for the next 3–5 years to ensure all regulations on recruitment, training, and compensation are aligned with the company’s development goals.

2. Blindly Copying Policies from Other Businesses

Many small businesses copy HR policy templates from large corporations without customizing them to their own scale, culture, and budget.
The result is a policy that is difficult to apply, detached from reality, or causes internal conflicts (e.g., a bonus system that is too high for the company’s financial capacity).

Solution: Build a unique policy that aligns with the company’s “DNA.” You can reference external models, but they must be adjusted to fit your personnel, budget, and industry.

3. Not gathering feedback from departments and employees

An HR policy designed entirely by management without consulting feedback from the operational team is likely to fail upon implementation.
For example, unrealistic overtime policies or KPIs can make employees feel pressured, leading to reduced productivity and morale.

Solution: When developing policies, conduct internal surveys and interview representatives from various departments or key employee groups to gather diverse perspectives.

4. Lack of transparency and weak internal communication

Even the best policy will not be effective if employees do not clearly understand their rights and obligations.
A common mistake is for businesses to issue regulations via long, confusing emails or documents without organizing clear training or communication.

Solution: Create an employee handbook or an internal portal for easy reference. Additionally, organize “onboarding” sessions or regular communications to update employees on new policies.

5. Not measuring and updating periodically

HR policies are not static documents. However, many businesses issue them and then forget about them, failing to evaluate their effectiveness or adjust them to market changes.
In such cases, salaries, benefits, or bonus schemes can become outdated compared to industry standards, causing talented employees to leave the company.

Solution: Businesses should evaluate policy effectiveness every 6–12 months based on actual data: turnover rate, productivity, personnel costs, and employee satisfaction (Employee Satisfaction Score).

6. Inflexibility in application

Some businesses have overly rigid regulations that are not flexible for special cases.
For example, a work policy that only applies standard business hours and does not support remote or part-time employees, while the market trend is shifting towards a hybrid model.

Solution: Implement flexible policies with conditions: allow for flexible hours, performance-based remote work, or individual agreements – as long as work results are guaranteed.

7. Not investing in tools to manage and track policies

When HR policies are implemented on paper or in Excel files, it is very difficult for businesses to track, update, or ensure consistency.
This can easily lead to data loss, errors in compensation, or procedural violations.

Solution: Use Human Resource Management (HRM) software to automate processes like timekeeping, compensation, benefits, and KPIs, helping policies to be implemented transparently and consistently across the entire system.