Best Practices in Human Resources: An In-depth Analysis of Innovative HR Policy Used by Top Companies

Abstract

Throughout history, business and labor have had a tumultuous relationship, with some companies having little regard for their employees and other’s going above and beyond the call of traditional organizational practices and policies. The Social Exchange Theory posits that “there is a ‘norm of reciprocity’ between employers and employees in business, which means that when someone is treated well by a person or entity they will feel a sense of obligation to reciprocate” (Gilbert, Caroline, et al.). In other words, if an employee feels as if their company cares about their well-being and invests in their ability to thrive in that organization, then the company will see a return on their investment. On the opposite side of the spectrum, if employees feel as if their company, or more specifically their Human Resources department, is not addressing or committed to the needs of employees, then the affective commitment of employees will decrease (Gilbert, Caroline, et al.). The following research reflects a thorough analysis of five companies that embody the social exchange theory through their Human Resources policy and practices in the following areas: time-off policies, compensation, retirement plans and stock options, health, childcare and related benefits, general work environment and leadership development. The specifics of these general policy areas, as well as details on the innovative HR practices of Southwest Airlines, SAS Institute, Netflix, Microsoft and Lincoln Electric, will be outlined in the pages to come as part of a comprehensive overview of companies that demonstrate human resources best practices and policies in the United States.