How to Create HR Policies That Actually Work in Your Small Business

HR policies are one of the most important foundations in any small business, yet they are often the most misunderstood. Many business owners know they should have policies, but do not know where to start or feel overwhelmed by the corporate-style documents they see online.

In this episode of The HR Link: People-First Conversations, Amy Christopherson, founder of Grounded HR, breaks down how to create HR policies that are simple, meaningful and genuinely useful in your business. Instead of lengthy, jargon-heavy manuals, Amy shows how to build policies that reflect your values, meet your legal obligations and support clear communication across your team.

Why HR Policies Often Fail in Small Business

Most small business HR policies fail because they are:

• Too long, complicated or filled with jargon

• Copied directly from templates without being tailored

• Never reinforced, reviewed or explained

• Misaligned with the culture the business wants to create

Amy explains that policies should never be written just to “tick a box.” When policies are overwhelming or unclear, employees ignore them and leaders forget about them. Effective policies should guide behaviour, support compliance and help create the workplace you want to build.

Start with Your Values, Mission and Vision

Meaningful policies begin by reflecting who you are as a business. When your policies align with your values, they:

• Communicate expectations clearly

• Support the culture you want to foster

• Provide boundaries that feel fair and consistent

Policies are not just rules. They are tools that show your team what you stand for and how you work together.

Understand Your Compliance Obligations

Policies also need to meet Australian workplace laws. This includes:

• The Fair Work Act

• National Employment Standards

• Relevant modern awards

• Work health and safety obligations, both physical and psychological

Every policy should be accurate, lawful and aligned with these requirements. Compliance is essential, but it does not have to be complicated. Start with the basics and build from there.

The Three Steps to Creating Useful HR Policies

Amy’s people-first framework helps you create policies that work in practice, not just on paper.

Step 1: Start with the Legal Essentials

Begin with compliance. Identify the areas where you must have clear rules and guidance, such as:

• Anti-discrimination

• Workplace bullying and harassment

• Leave entitlements

• Safety obligations

These policies protect both your business and your employees. They also create clarity from day one.

Step 2: Use Clear, Plain Language

Your policies should be understood the first time someone reads them. Avoid jargon, legal phrasing and corporate terminology. Instead:

• Write as you speak

• Keep sentences short

• Prioritise clarity over complexity

Plain language saves time, reduces confusion and prevents unnecessary back-and-forth questions.

Step 3: Reinforce and Review Your Policies

A policy only works if it is implemented consistently. This is where many small businesses fall down.

Amy recommends:

• Introducing policies during onboarding

• Reviewing policies every two years or when legislation changes

• Having leaders model the behaviour the policies outline

• Consulting your team when updating key policies

Policies stay alive in your business only when your team understands them, sees them in action and feels included in the process.

Why Policies Matter for Culture, Safety and Communication

HR policies are not just compliance documents. When done well, they:

• Reduce conflict and confusion

• Build trust between leaders and employees

• Support psychological and physical safety

• Strengthen your culture and values

• Provide clear boundaries that help everyone work better together

Small, consistent steps create a strong HR foundation. You do not need 20 policies at once. Start with a few that matter most and build your manual gradually.

Free Resources for Small Business Owners

Grounded HR offers a range of free tools to help you get started:

•  Employee Engagement Checklist

•  Guide to Managing Underperformance 

Learn more about how to lead with a people first approach to HR through our The HR Link: People-First Conversations Podcast is available on Spotify, Apple Podcasts, and YouTube.

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