How Can We Improve Our Leave Policy to Be Fair for All Employees? Seeking Advice on Balancing Extra Hours and Performance Ratings

Leave Policy and Queries

I am working as an HR Manager in an IT company with a current strength of 30 employees. Recently, we introduced a new Leave Policy for our employees. I am sharing our company leave policy here and have a few questions regarding it. I would be really thankful if you could guide me further and clear my doubts.

On the 1st of every month, each employee receives an addition of 10 hours for leave. Upon accumulating extra working hours, we can generate a leave of 10 hours. An employee can accumulate a maximum of 200 hours.

Types of Leaves

The leaves will be of the following types:

a. Full day: 10 hours
b. Half day: 5 hours
c. One third: 3 hours

Please note that, as per this policy, extra hours are calculated after 6:45 pm. In this system, we require a minimum of 1-hour attendance. If you leave at 7:30 pm, you will not be credited with any amount. The minimum time required to leave the office is 7:45 pm. Additionally, hours will be accumulated with a difference of 30 minutes. For example, if you leave at 8:00 pm, it will still be counted as 1 hour. The hours need approval from your Team Leader and HR.

Other than this, there are casual leaves, emergency leave, emergency leave without balance, and leave without pay. Each of these leaves has a separate procedure for application.

Queries Regarding Leave Policy

My query regarding this is: As mentioned above, on the 1st of every month, there is an addition of 10 hours to every employee's account, which is equivalent to 1 leave. Also, regarding the extra hours, if anyone has 10 extra hours in their account, that will make 1 leave. What about those people who are not staying extra time and completing their tasks on time, leaving the office at 6:30 pm? I just want to ask if 10 hours = 1 leave makes any sense because, as per the standard labor laws, an employee cannot work more than 9 hours a day. Kindly help me regarding this.

Another query is that suppose a person has worked continuously overtime and has 10 hours in their account, which makes 1 leave for them. They apply for the leave, and the leave has been approved. However, according to the Weekly rating system (parameters that we use for rating like efforts, performance, and discipline/attendance) that we follow for appraisal, if a person has taken that leave, although it has been approved, we are still deducting points (presently we are giving a rating out of 5) for that. My team has a query about what the benefit of those extra hours is if the points are still being deducted.

I would really appreciate it if you could tell me what should be the best possible route to this and whether we need to change our rating criteria for performance appraisal.

Looking forward to hearing from you soon!

Thanks and Regards,

Shruti Verma
HR Executive.

Your proposed Leave Policy reminds me of the old saying, "Old wine in a new bottle!" I don't think it is a leave policy but rather a policy of compensatory time off for overtime work, most likely based on industry practice. Deep down, it seems like a clever way of depriving employees of the statutory benefits of overtime wages, which are normally twice the ordinary rate of wages per hour.

Even if your industry wages are far higher than the statutory minimum wages due to collective bargaining, the number of normal working hours per day below the statutory standard, if any, and the rate of overtime wages should always be fixed in consultation with the employees.

The proposal mentioned in your second query is somewhat paradoxical. According to this proposal, employees who finish their work and leave at the normal closing hour would be considered more efficient, whereas those who continue to work beyond the normal working hours at the request of management and avail themselves of proportionate compensatory leave thus earned would be seen as performing poorly.

Thank you.

This policy may work provided the extra hours worked are counted at double the rate. So, in a week, for 10 hours of extra work, a credit of 20 hours should be given.

Otherwise, the policy is nothing but what Mr. Umakanthanji has correctly commented...