Company Policies & Procedures: Importance and Examples

Deepak Juneja

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No matter the industry, every organization requires policies and procedures to ensure effective and successful operations on a day-to-day basis. The information found in company policies and procedures manuals helps facilitate compliance with laws and regulations, streamlining internal processes, and providing guidance for decision-making, among other benefits.

In this article, we’ll discuss the main reasons that make policies and procedures crucial for businesses. Before diving into their importance, let’s first get the definitions of policy and procedure out of the way.

Policy vs. Procedure

Policies and procedures are often used together, but the two terms can never be interchanged.

A policy is a deliberate course of action that establishes the standards for corporate strategy and objectives. It pieces together an organization's vision, values, and daily operations. Policies highlight critical processes and guide decision-makers on the best ways to deal with problems as they arise.

Meanwhile, a procedure refers to a detailed action plan for implementing a particular policy. Essentially, procedures can be seen as a road map. They prevent common misunderstandings by defining job responsibilities and establishing job boundaries. Procedures allow managers to regulate events and issues pre-emptively, effectively preventing their organization from making crucial investment decisions.

Implementing policies and procedures equip employees with a holistic perspective of their workplace, allowing them to understand the culture the organization is seeking to build, together with the acceptable behaviors and how to achieve them.

Policies and Procedures: Why are they Crucial for Businesses?

A well-drafted string of policies and procedures guarantees that company standards, values, culture, and benefits are well established. Policies and procedures address frequent HR concerns or queries while reducing the risk of receiving unfair employment practices complaints. The following are the other reasons that make policies and procedures crucial for a company’s success:

Consistent Processes and Structures

Policies and procedures are relied upon to keep a company’s operations from falling apart. Everybody can expect their organization to run smoothly if everyone adheres to the policies and procedures put into place.

Management structures and teams perform as expected while the mistakes and hiccups in current processes can be identified and addressed in no time.

Individually, employees can also benefit from consistency in a company's practices. They fully understand their responsibilities, the results expected from them, and what they can expect in return from their managers and coworkers. This enables them to perform their duties with excellence and utmost confidence.

Increased Compliance

Every industry has its by-laws, regulations, standards, and best practices that companies need to follow. Policies and procedures are put in place to assist organizations in complying with international, federal, state, and local laws and regulations.

Organizations, particularly their HR departments, should constantly assess the existing compliance environment to ensure compliance. Policies and procedures are a crucial part of this environment and must be regularly updated in response to new and changing regulations as well as industry best practices.

Apart from ensuring that employees clearly understand what's expected of them in all aspects of their employment, workplace policies and procedures also safeguard organizations from legal liability when disruptions occur.

Better Quality of Service

Employees that follow a clear set of procedures accomplish things correctly and more efficiently while providing excellent customer service. These accomplishments dramatically improve the quality of a company's products and services. As a result, the company's reputation improves. Employees can be confident that they’re carrying out their roles and take pride in what they do.

A Safer Workplace

As we mentioned, policies and procedures clarify and reinforce the standards expected from employees in all their work dealings.

At the same time, they also help employers manage their staff more effectively by defining what is acceptable and unacceptable in the workplace.

Policies and procedures outline the methods and available options for resolving workplace grievances.

Therefore, organizations must take the needed measures to communicate the policies and procedures to their employees in detail.

Employees must be given a copy (either hard copy or electronic) and acknowledge that they have received and understood the said policies.

Builds a Stronger Culture

Ultimately, the most important purpose of having a clear set of policies and procedures is to help foster a stronger company culture.

A more cohesive and trusting culture emerges when all employees understand how they should go about their daily routines and have a firm grasp of the core ethical values behind such policies and procedures.

Once an organization adopts this kind of culture, it reaps numerous benefits, including increased productivity, lower employee turnover, and significantly reduced compliance issues. These characteristics can provide a crucial advantage over competitors.

Although the phrase "policies and procedures" can be ambiguous, a good set of them is critical, and whatever time and effort to get them right is well worth it.

Examples of Company Policies and Procedures

Employee Conduct Policies

Policies and procedures on employee conduct specify the duties and responsibilities that each employee is required to follow as a condition of employment.

They are put in place to serve as guidelines for the prescribed employee behavior. Conduct policies and procedures typically cover proper dress code, workplace safety measures, and policies and procedures on computer and Internet usage.

Such policies also detail the procedures employers may utilize to penalize inappropriate behavior, such as issuing warnings or termination of employees.

Policies and Procedures for Attendance and Time Off

Attendance policies establish standards and guidelines for employees to follow regarding schedule compliance. They specify how employees may request time off or notify managers of an absence or late arrival.

These policies and procedures also outline the ramifications of failing to adhere to the set schedule. For example, employers may limit the number of absences permitted during a given period.

Employees who miss more time than their employer allows will incur disciplinary action as indicated in the policies and procedures on attendance and time off.

Workplace Security Policies

Policies and procedures on workplace security are in place to protect not only the people in a company but its physical and intellectual property as well. These policies may include aspects of entering a facility, such as the use of ID cards and the procedures for signing in as a guest. Equipment such as smartphones or company laptops may need to be logged in before they can be signed out.

Computer security is a top priority for companies nowadays. As a result, various policies that address various topics, including the frequency of changing passwords, reporting phishing attempts, and log-in procedures, are put in place.

Personal devices, such as a USB drive from home may also be prohibited to prevent the unintentional transmission of computer viruses and other malware.

Policies and Procedures for Equal Opportunity

Equal opportunity laws are measures that encourage fair and equal treatment in every workplace.

Equal opportunity policies and procedures, such as anti-discrimination and affirmative action regulations, are employed by businesses to encourage impartial behavior in the workplace,

These policies prohibit unacceptable behavior by employees, supervisors, and independent contractors concerning another person's race, gender, sexual orientation, or religious and cultural convictions.

Policies and Procedures for Health and Safety

Policies and procedures on health and safety outline a course of action chosen to influence workplace decision-making and guide health and safety initiatives in a working environment.

These policies are typically described as a set of regulations defined at the federal level and implemented by individual workplaces.

Public intermediary corporations may also be utilized to develop policies in some jurisdictions.

Key Takeaways

Policies and procedures are crucial for every company to operate at optimal efficiency and productivity. Apart from serving as a guide, they also reduce liability risks and promote consistency across the organization for employees and customers alike.

This consistency helps build a healthy reputation for any organization, especially concerning employee touchpoints with clients.

Successful organizations view their HR policies as more than just a compliance requirement. Instead, they understand that these critical components establish guidelines and parameters for how their business functions.

Coming up with rules cannot be done successfully unless adequate and well-developed policies and procedures are in place. Unfortunately, in the absence of rules, people resort to creating their own.

So clearly, policies and procedures are critical to running any business successfully.

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