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Policy Exceptions In Todays Business World, Flexibility Is The Key

May 25, 2001
Related Topics: Policies and Procedures, Featured Article
All human resources professionals in one instance or another have had to dealwith the challenge of policy-related exceptions. These same individuals oftenspend a considerable amount of time delivering comprehensive policies andprocedures to their organization's human resources. As a result, when confrontedwith a request to circumvent "policy," they often intuitively assume adefensive mode.

    The reasons for opposing exceptions are fairly well known and obvious:"they are setting precedent," "will open the proverbialfloodgates," "will lead to inconsistencies," etc.

    However, in today's rapidly changing business environment, rigidity mustoften be replaced with flexibility to serve "customer" needs,especially in an expanding global environment where many of the old rules don'twork. The challenge to human resources professionals is to become more proactive,rather than reactive, and to change the focus towards managing and controllingthe process, rather than being controlled by it.

Getting ahead of the curve
    Organizational openness to policy exceptions may run the gamut from the"zero tolerance," often found in old-line autocratic organizations, tothe "no limits anything goes" approach prevalent at many dot.comcompanies at the apex of their prosperity.

    Historically, the autocratic approach has proven to be successful in managingan International HR (IHR) environment.

    Managers and employees knew the "rules" and were hesitant to try togo outside of them; the HR department generally said "no" whenasked. In today's worldly business environment, employees are different becauseit's still a seller's market for high quality talent in the labor market. Also,managers are different because they're being held accountable for results andstaff departments to become enablers rather than barriers.

    Lastly, HR departments are different because they must find ways to"partner" with their internal clients rather than control them.

    Policies once interpreted as the "law" are now designed to setbroad parameters to guide, rather than dictate, managerial behavior. They are alsosensitive to cultures and environments that extend beyond headquarters.

    The easiest way to avoid exceptions might be to have no policies at all anddeal with issues on a case-by-case basis. The reality is that thesolution to each "case" becomes the newest de facto policy andprecedent, where it then becomes the starting point for the next negotiation. Thereality is that there are few organizations of any size or complexity that caneffectively survive in a "policy-free" environment. It would also benaive to believe that the last agreement wasn't the newest informal policy.

    Designing policies that are broadly written (which are becoming more of thetrend) provides an environment where fundamental organizational objectives areprotected. At the same time they allow for flexibility that will facilitate anorganization's ability to meet real challenges.

    It is easy, for example, to say that the organization does not, as a matterof policy, pay international assignment premiums. However, the policy may seemludicrous when trying to convince a valued employee to accept an internationalassignment in a remote third-world country. In this situation, the hiringmanager needs some flexibility to successfully conclude the negotiations withthe employee.

    There are a number of proven proactive steps that can be employed whenmanaging exceptions.

  • Develop formal documentation (however broadly) that at a minimum willallow one to frame and control the discussion and serve as a compass throughoutthe discussions.

  • Gain line management credibility and assurance that you are willing tolisten to reasonable requests, while adhering to the precept of maintaining aculture and consistency within the organization.

  • Develop a reputation demonstrated through the practice of beingreasonable, open to suggestions and empathetic to unique situations, not be theproverbial rubber stamp.

  • Ensure that those requesting exception approval know that they must cometo the table with sound reasoning, and a legitimate and verifiable business reason.Also, understand that every request is not the turning point in theorganization's history.

    Successfully achieving these goals will enhance your reputation as a businesspartner and will have a positive effect on the number and type of exceptionrequests received.

Understanding your own policy or intent
    Exceptions are often granted simply because there isn't a legitimate reasonnot to approve them. Aggressive managers will seek to exploit this void.Organizations that have gone to the trouble of articulating a philosophy orpolicy have a right to expect HR professionals to be able to articulate theunderlying rationale. If it is not possible to articulate why something isdiscouraged, there is a loss of credibility with line management.

    Once exceptions are made, take the time to research the policy issue from theorganizational perspective. Find out if similar requests have previously beengranted or denied (it is a fairly safe assumption that the requesting party hasdone so). Make sure there is an understanding of the underlying intent of theestablished policy.

    If it is troublesome arguing why a particular policy must be followed in aspecific case, it may be that the policy no longer makes sense. Policyprovisions that may have seemed reasonable and necessary a number of years agomay now be outdated and in need of change.

    In responding to exception requests, the answer may necessitate a resounding"NO," but the answer often deserves to be "YES." Make sureyou've done your homework before you enter into the negotiations.

What should be open to negotiation?
    Once having completed all of the research possible, it is plausible that whatis being asked for is not an exception, but simply a request for organizationalflexibility that is within the intent of the original policy.

    One goal of a corporate staff department is to be a business partner and nota success barrier. Listen to the request, match it against what you know aboutthe intent and objective of the policy and determine if the request backs theunderlying policy intent.

    If the request is proven (to you) as being necessary, then it shouldn't beviewed in the context of being an exception, but rather as something that isnecessary for success in a business unit and operational objective. Be firm, butbe reasonable.

    Some requests, however, are clearly exceptions and should be treated as suchor simply not entertained. Some examples:

  • Those that are significantly outside of reasonable cost thresholds anddon't appear to make business sense. In these instances, it is the requestingmanager's obligation to provide the business reason and the return on investment(ROI) justification in making the request, not the HR department! If they can'tdo it, then it is time to send them back to do their homework.

  • Requests that are contrary to the intent of the original policy, or arecontrary to company or host country culture. In such cases, the business caseargument needs to be strong and not built on unfounded suspicions or fears. Askyourself, has the requestor made a sound case or is it an emotional plea?

  • Requests that appear to circumvent the spirit and/or intent of national orlocal labor law, or regulatory issues

  • Issues that have ramifications far beyond the immediate situation (i.e.,benefits, tax filing requirements and allowances consistently denied to others).

Consistency and equity still count
    One of the primary purposes of a policy (formalized or not) is to maintain alevel of consistency between groups of individuals, organizational entities,etc. Obviously, an unrestrained culture of granting policy exceptions isdiametrically opposed to consistency.

    Where an organization is willing to consider exceptions, a monitoring processmust be established to identify when (or if) anomalies arise.

  • Is one area (IT, a sales unit, etc.) receiving all of the exceptions whileothers are forced to conform?

  • Are exceptions granted more frequently when males are the beneficiariesrather than females? (This raises obvious EEO issues.)

  • Does the European management team find itself more successful than theAsian team?

  • Do all of the exception requests revolve around one or two specificissues? If so, it may be an indicator that the policy simply isn't working.

    Consistency is an important objective and one that requires vigilance inorder to maintain.

Arriving at a win/win
    The goal throughout the entire exception negotiation process is to arrive ata place that:

  • Resolves the situation at hand in the most fair and appropriate manner.

  • Enables both parties to have fulfilled their managerial and professionalresponsibilities.

  • Maintains the organization's underlying culture and business objectives.

    Developing and fostering a cooperative and mutually respectful relationship,as opposed to an adversarial environment between the "gatekeepers" andline management is a necessary ingredient. It is also important that bothparties in the negotiations have the ability to conclude them. It is afrustrating experience when, after a series of e-mails, telephone conversations,and perhaps personal visits, one of the parties must then go "getapproval."

    Finally, it is important to recognize that the final negotiations are justthat, negotiations. Parties cannot come to the "table" withintractable positions. Each party must be open to movement.

After the deal
    Once the deal is concluded, it is important to document what transpired andnot duplicate efforts the next time the same issue arises. Think how much easierlife would have been if there was a solid source of reference the first time youstarted the negotiation process

    Finally, remember that in today's fast moving, ever-changing globalenvironment, the successful organizations maintain the flexibility necessary toaddress varying business and family situations and cultures, and can negotiatepolicy exceptions competently and carefully.

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