Enjoying Employing

"The board makes policy and management implements policy." It sounds so simple. But developing and administering personnel policy in your particular co-op may get confusing. Personnel issues carry an emotional charge that bylaws and budgets lack. Often when co-op workers talk about "democratic management," they mean having a voice in personnel decisions.

This article will discuss the players and their respective roles in development and creation of personnel policy. In Part 2 (in the next issue), I'll explore their roles in personnel administration.

Amending Existing Policy

Let's say you don't need to completely overhaul your policy; it already exists in writing. But you need to add or revise a distinct section.

The players:

Full board of directors:

  • Gives final approval to policy recommended by personnel committee; usually a rubber stamp. Stays familiar with policy; each board member should own an updated copy.

Personnel committee of the board:

  • Requests management to submit drafts, or responds to management-initiated proposals.
  • Reviews management proposals at regularly scheduled committee meetings; asks questions of management.
  • Obtains expert legal opinion (see below).
  • Makes formal recommendation to board to adopt policy in final form.

Management (general manager and/or management team):

  • Sees need for addition or revision to existing policy, or responds to board requests through personnel committee.
  • Drafts proposals, gathers staff input, submits formal proposals to personnel committee with rationale. May delegate policy drafting to an individual.
  • A management team, consisting of mid-level managers who supervise others, could advise the general manager in the policy development process:

Non-management staff:

  • Gives input on proposed policy, using established channels. Individual staff may also.propose policy changes and additions.

"Established channels" can be: posting proposals with room for written responses; distributing memos with request for comments to appropriate staff; setting aside a section of regular department or all-staff meetings for questions and concerns; holding discussions in management team meetings after managers have heard comments from those they supervise; etc.

The idea is not democracy for democracy's sake. Don't make the response process too rigid or time consuming. For instance, you don't have to require that a proposal be posted exactly two weeks. Nor do I think that staff should vote on policy proposals. This would blur board/management roles by giving the staff the illusion that it's their prerogative to adopt policy.

However, I believe that staff involvement in development yields better policy. The people who are directly affected are most likely to be aware of possible problems or discrepancies in implementation. They will ask good questions, e.g., "What if my hours fall below 20 a week on a slow week?" or "What if a holiday falls during my vacation?"

Decisions in policy development (as opposed to policy administration) rarely have to be made in a hurry. I think it's worth putting up with a lengthy, drawn out process to arrive at well thought out policy. Without staff comments, the board could pass policy that later turns out to be "full of holes." Moreover, people will generally be more supportive of the policy, once adopted, if they had a voice in its creation. They will be familiar with it and more likely to abide by it.

Wholesale Overhaul of Existing Policy

If you have no written policy or one that no one uses in daily work life because it is hopelessly antiquated or contradictory, the roles of the players in policy development are modified.

Full board of directors:

  • Still gives final (mostly rubber stamp) approval to policy recommended by personnel committee, but initiates process of overhaul. Sets aside resources, issues directives to management, determines priority of the project in relation to other management tasks.

Personnel committee of the board:

  • Orchestrates process of policy development, including management and non-management staff comments and review by attorney.
  • Makes formal recommendations to board to adopt policy in final form.

Since this is a more time consuming and far reaching project than merely amending or adding to existing policy, it may be too much to expect management alone to come up with draft proposals for all the policy. The involvement of members of the personnel committee depends on their expertise and availability. If a committee member happens to be a labor lawyer or experienced manager, it would benefit the co-op to use her/his skills in drafting policy. However, an amateur personnel committee could waste a lot of time and effort "reinventing the wheel" or generating overly bureaucratic unrealistic policy that looks workable on paper but proves to be unwieldy in a business setting.

The personnel committee should find existing model policy to adapt, and/or hire outside services to adapt, to the particular requirements of the co-op's organizational structure and culture.

Management (general manager and/or management team):

  • Participates in process of policy development orchestrated by the personnel committee.
  • Drafts and/or reviews proposed policies as needed. It may be useful to
  • have the general manager or a member of the management team actually serve on the personnel committee.

Non-management staff:

  • Gives comments on proposed policy, using existing channels.

Review by an Attorney:

Whether you're starting from scratch or merely revising, be sure to have the final wording reviewed, before it goes to the board for approval, by an attorney who practices law in your state.

The field of employment law is rapidly changing. Various federal and state regulations may apply to your co-op, depending on your size and location. Your personnel policy should conform to existing regulations of the IRS, INS, Employment Security, Workers Compensation, COBRA, etc. By this I mean your policy should not contradict what the business is legally required to do.

But beyond legal requirements lies a morass of legal precedents established by recent cases in different states. Employees are increasingly challenging in court the power of employers to fire them or lay them off for any reason besides proven misconduct. Courts have tended to uphold employees in lawsuits when employers have failed to abide by their own personnel policy. The court interprets policy as an "implied contract" between employee and employer.

For example, a California court held that an employee had been wrongfully laid off and must reinstated, because the personnel handbook of the company referred to him as a "permanent employee," thus guaranteeing him lifelong employment (in the absence of any misconduct.) Companies across the country hurried to replace all references to "permanent employees" with phrases like "regular."

While you must be sure a lawyer reviews your policy for conformance with legal requirements and avoidance of problematic phrases, don't hire her/ him to generate drafts of policy. First, this would be very expensive. Beyond that, lawyers are not primarily business people. They may not be familiar with the daily realities of running a retail store. Their perspective tends to be more abstract.

Finally, legal language is often ponderous and hard to understand. Maybe this is because lawyers in medieval Europe were paid by the word! At the risk of offending a few readers, I think "legalese" in personnel policy is unnecessarily harsh, condescending and alienating. The tone implies that employees have to be kept in line with threats.

So, first decide what you want to say and how you want to say it. Then work with an attorney to make whateveradjustments you need to ensure the policy's legality while keeping its spirit.

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