A Complete Guide to Creating an Ideal Leave Policy (and Implementing it)

As a CEO & HR Manager striving to keep your team motivated and productive at your workplace, many employee engagement activities may have come to your mind. While fancy corporate retreats may work, they may not always be the most cost-effective way to boost employee morale.

An Ideal Leave Policy facilitates a good work-life balance for your employees ensuring that when they do come into work again they are refreshed and motivated.

Although creating a leave policy for your employees is an integral part of the employee engagement policy; it is often the most ignored.

Thus, we at Quikchex decided to create a complete guide to creating and implementing an Ideal Leave Policy.

Types of Leave Policies

There are a variety of Leave Policies that could work for your company. Leave policies tend to fall in one of three types –

a] Fixed Number of leaves credited upfront at a fixed time of the year

This type of Paid Leave policies has all the fixed number of paid leaves being credited on a fixed date. Thus, according to company policies, you could grant all the leaves on the start of the calendar year or the start of the financial year.

b] Set amount of leaves accrued on a daily/weekly or monthly basis

Fixed amount of leaves are accrued on a daily/weekly or monthly basis instead all leaves credited all at once.

c] Unlimited number of Leaves

Employees aren’t given a fixed amount of leaves, instead they can use unlimited number of leaves as they’d like.

How do you choose which type of leave policy works best for your company?

As a decision maker of your company on choosing which leave policy works best for your company there are few things to consider.

Which leave policies have your employee’s best interests at heart?

It is known that a flexible/unlimited leave policy encourages your employees to take as many leaves that suit them. Except when there is no limit to how many leaves are granted, employees may not take paid leaves sparingly.

Thus, understanding the employees opinion on the leave policy can help you implement a leave policy that serves the employees’ and the company’s best interests.

Why you need to create different Leave Categories?

An employee may use paid leaves for different reasons such as sickness, personal emergencies and vacations, maternity leave. After understanding which leave policy works best for your employees and your organization then you need to understand how to categorize the leaves.

Most companies prefer to have different leave categories such as sick leaves and earned leaves because clear distinction helps in better tracking and helps you stay compliant with Labour Laws.

How do you decide the number of Leaves granted per Leave Category?

After distinguishing Leave Categories accordingly, you now have to make a decision on the number of leaves granted per category.

The number of Privileged and Casual leaves that are entitled to your employees is determined by the State you are in. The number of leaves entitled is determined by the State’s Shops and Establishments Act.

You can click here to know more about the exact number of earned and casual leaves entitled according to your State’s Shops and Establishment Act.

All about Leave Management-

After you have implemented the ideal leave policy, the next steps would be to understand how you can manage leave applications & leave accruals and calculate leave balances with least amount of time and effort.

Managing Leave Applications-

a] Design a set process for leave applications.

Being organized and communicating clearly is the key to managing employee leave applications. Having a set process on applying for leaves and approvals of the same is important as Leaves do play an important role in crucial activities like Payroll.

You may think it’s simple and obvious, but outlining this process can help eliminate confusion for employees.

b]Decide on who approves those leave applications

Identify the person who would be responding to employee time-off requests. Is it a direct supervisor or the HR Manager? Deciding on this person is important so that the employee knows who to send their requests to.

Tracking Leave Applications-

Leaves are an integral part of the Payroll process. Thus collating leave applications at the end of the month from emails or leave requests slips can be a major task. Tracking these on a Leave tracking software can help you manage them with the least amount of time and effort. Using an intuitive Leave Management Software can help you track leave applications & approve leaves requests. Most Leave Management Tool also works for your employees and will reduce the dependency and increase transparency across the board.