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SOP for Human Resource (HR) Department

SOP for Human Resource (HR) Department

Standard Operating Procedures (SOP) Manual for Human Resources (HR) Department

The activities of the HR department determine how the human resources of an organization are managed from recruitment to retirement. How the HRM operations are managed has a bearing on manpower availability (recruitment, allocation, succession planning, promotions and transfers), training and development, payment of wages and salaries, employee performance, employee motivation and morale, etc. If the processes and operations of this department are not efficient, the overall HRM will be no better and this will affect the entire enterprise.

For example, an incorrectly executed recruitment exercise could result in the hiring of misfit candidates. This will further affect the work of other departments where such recruits would be placed. This is avoidable if there is a sound recruitment process in a place defined by planned and mapped procedures. Similarly, for various other HR activities, the processes and operations can be defined using SOPs. SOPs can play an affirmative role in defining, streamlining, and mapping the HR processes and operations of an organization. Sometimes large companies also prefer to hire the services of top HR consultants to design SOPs and the HR manual for them.

In this article, we will explain a wide range of benefits of having standard operating procedures for an HR department.


The recruitment process should be flawless as this is the channel through which you are adding a valuable asset to your organization. In other words, a good recruitment process can help ensure that the right people are hired for the right job. Everything should be in proper order and coherent with the organization’s goals and mission. This is what every mentor in any professional HR strategy consulting class preaches.

There’s a series of requirements that goes into planning and executing a recruitment process. This includes specific information on manpower requirements, job analysis report, identifying the pool of resources, preliminary screening, conducting tests and interviews, scheduling interviews, salary negotiations, and issuing appointment letters. This entire process can be easily mapped with SOPs. By having well-defined and mapped SOPs, the recruitment process could be made strategic and more aligned with the business goals and the rest of the organization. It will also increase the effectiveness and efficiency of the recruitment process.

On‐Boarding and Induction

On-boarding is the time when an employee is formally made a part of a company after being hired and acquainted with his or her new work environment. This is also when recruits complete the official joining formalities. They are introduced to the organization, the work culture, HR policy manual, their superior authorities and colleagues, workplace policies and procedures manual, the office, the canteen, and so on.

Again, on-boarding is something that should not be treated as an informal tour of the office meeting people and seeing places or be left to self-study of the workplace policies and procedures manual. It should be planned to detail to avoid any subjectivity. There should be a definite sequence in how the on-boarding activities are carried out. And thus, the need for SOP arises.

For instance, there should be a defined timeframe for completing the documentation or paperwork formalities (say on day one). On day two, the recruits could be introduced to their immediate reporting authorities or departmental colleagues. For self-help and self-reference of the recruits, the HR manual or the HR policy manual is also handy.

Training and Development

All the life coaches and top HR consultants iterate that one’s performance is determined by the training he or she underwent. Training is a determining factor in employee performance. It imparts the necessary knowledge, skills and expertise required for a job or a project or an organization. It is also important for companies to look into that their employees are growing professionally. This calls for various development programs.

In many big companies, there are hundreds of new hires that undergo training every year with multiple batches, different training programs, host of trainers, centre arrangements. Apart from that HR also needs to identify the trainees, coordinate with the in-house trainers or the training centres, prepare the training schedules, ensure necessary formalities are completed at every level, oversee the training programs, issue training completion certificates, and so on.

Without SOPs, managing all these activities to complete a training cycle could be a herculean task. If all the required tasks are identified, logically sequenced, and defined with details, it will become easier for the HR team to carry out the training function systematically.

Performance Mapping & Appraisals

For employees to deliver the performance expected of them and achieve the performance-related objectives, they must know the KPIs and KRAs.

Everyone gives in their best efforts and expects a good hike in salaries or even get a promotion at the end of the evaluation period. But how are these decisions made?

If an employee did not find a performance appraisal report satisfactory, what answers would HR or reporting authority have?

The answer is PMS consisting of KRAs, performance scorecards, KPIs, the methods of measuring performances, etc. A good PMS should be able to identify the excelling areas of performance as well as the areas of improvement. There should be no scope for subjectivity and bias in how performances are measured.

SOPs can be more than instrumental in designing a PMS. There has to be a basic procedure to be followed in designing the KRAs and KPIs for each role irrespective of the difference in content. The organizational policies and principles pertaining to employee management also need to find a place here.

Exit Process

The exit process involves aspects like processing of resignation letter, exit interviews to be conducted, full and final settlement from finance, departmental clearances, handing over and taking over, farewell event, etc. From company to company, the exit formalities may vary. But it is better to have a well-documented exit process.

SOPs are important here because there are several activities involved which need to be executed in order while adhering to company policies. There are often multiple departments involved and the entire exit process needs to be mapped passing from one department to another. For example, the finance department needs to take the necessary approval from HR before initiating the full and final settlement. HR can give such approval when the conditions defined in the SOP are met. Again, the rules may vary from company to company, but it is important to have these rules incorporated in the form of SOPs.

A smooth exit process not only helps in timely completion of the required formalities but it also creates a good image of a company’s HR in the industry which can also help a company get referrals from former employees.

Payroll Process

Payroll can be a complicated and bulky task for HR of any company. With an increasing number of employees, the task gets more complex. This is a reason why many companies prefer to outsource their payroll function. The entire process cannot be automated because the salary bills are usually hefty and actions might be irreversible. Even with ERP, there is still a requirement for human intervention and coordination. But even an ERP system needs to be customized according to a company’s planning, policies, and practices covering approvals, calculations and disbursements.

The payroll process can be defined to detail using SOPs. Starting from the trigger (which usually is a date) to salaries being disbursed going through inputs, approvals, and calculations can be mapped in a step-by-step sequence using SOPs. ERPs are extremely useful for the digital processing part but as stated earlier the ERP also needs to be customized based on the SOPs being followed or intended to be followed by a company. Without ERP, SOPs could be the sole operational roadmap for HR to execute the payroll process.

Expense Management

Policies and procedures pertaining to employee expense management are important for settling bills. Bills often create rifts in company-employee relations. There could be issues on the authenticity of bills, sometimes even on the morality of expenditure made, delays in submitting bills for reimbursement, delayed reimbursements and so on. These differences are not healthy in any work culture. Therefore, the policies and procedures governing expense management must be unambiguous.

Companies can define the expenditure limits and the areas of expenditure, permitted type of hotel accommodation and type of transportation for different positions, periodical expenditure limits, conditions for special cases, method of calculating the reimbursable amounts, approving authorities, etc. By having wide and well-defined policies and procedures, companies can have a smooth and fair expense management system in place leading to more transparency, less subjectivity and bias, timely reimbursements, and better focus on work for all.

YRC Methodology

We emphasise that if businesses have to become truly process-driven in a competitive sense they must not only incorporate SOPs but also ride on digital processes.  We go beyond designing SOPs in pen and paper and seek to achieve SOP-ERP/HRM integration.

With SOP design as one of our flagship services, our experience tells us to make procedures look simpler in practice and implementation.

Easy-to-use HR SOP templates shall be defined to ensure that being process-driven is not an uphill task for the HR department of any business enterprise.

Human Resource SOP Playbook


    Benefits of Standard Operating Procedures (SOPs)

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    We work only for Visionaries.


    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.


    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)


    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.


    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.


    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.


    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.


    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!


    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.


    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.


    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.


    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.


    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.


    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.


    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.