How Can I Set Up an Effective HR Department for a Family-Owned Business with 300 Employees?

Hi All, I'm Joseph from Cebu, Philippines. I have a degree in BS-Psychology and am currently a candidate for a master's degree in Industrial/Organizational Psychology. I would like to ask for suggestions and comments on setting up an HR department.

Company Background

The company I'm working for is a family-owned business that has been operating for the last 25 years, mainly involved in electrical appliance retail. In 2001, it started operating budget hotels. It began from scratch and worked its way up to compete with big-name stores. Therefore, HR was not a top priority for the owners initially. They treat their employees really well. Although most employees, including managers, earn minimum wage, they receive significant bonuses if they perform well. This practice is observed in both the hotel and retail businesses.

Current HR Challenges

The current issue is the absence of a dedicated department or individuals responsible for succession planning, training, etc. The company has approximately 300 employees in total (across retail and hotel operations), based on the previous setup.

Regards,
Joseph

Setting Up an HRM Division

Glad to know that you want to set up an HRM Division. I hope your organization is doing well, as I get the same impression from your post. Since your organization's strength is above 300, I would suggest hiring consultants to set up the HRM Division. It's up to you to decide whether you want to automate the complete process and make your organization a paperless office or if you prefer to follow a manual process, which can be tedious and time-consuming. The pilot project typically takes 3 to 6 months to complete because, without employee data, nothing is possible.

Setting up company policies depends on the management's operational strategies aligned with business objectives, and you also need to comply with your country's labor laws.

Performance Appraisal System

The most critical factor to consider is the performance appraisal system. This is closely tied to succession planning, as it helps to assess employees' skill sets, talents, and competencies, unleash their hidden talents, promote them for better performance, and align them with your organization's growth factors.

Compensation and Payroll

Compensation and payroll are linked with the time and attendance module. You can also define an employee grading system describing their salary structure and associated benefits. You can efficiently use Excel for this purpose. I hope your finance department is managing employee salaries.

Recruitment Process

If you frequently recruit employees, consider creating a structured recruitment process tailored to your needs.

Employee Training

Employee training is essential for developing various skills, including workplace skills, but it does involve cost factors.

Perhaps you need to provide more information about your organization's modus operandi. Based on that, we can offer more specific recommendations. Use the research option at the top of the website to find information related to HRM setup. Various formats uploaded by members of this community can be studied and modified to suit your operational needs.

If you require more information, please feel free to reach out to me.

With profound regards,