Policies and procedures are both formal administrative frameworks that govern how a company operates. A policy operates at a high level, offering broad guidelines and expectations without explicitly dicating how they will be carried out. A procedure, on the other hand, outlines a clear, step-by-step process for accomplishing a task or following a rule.
Where a policy provides the north star, a procedure offers concrete directions on how to get there. Both work together to keep a business running smoothly.
A policy is a formal rule or a tenet that outlines the company’s direction regarding a specific topic or operational area. Functionally, policies serve as targeted mission statements or general guidelines, aiming to ensure decision-making within the organization aligns across the business. They provide a roadmap that guides employees as they work.
While policies are typically well-defined, they aren’t oriented explicitly on processes. They provide direction without including step-by-step requirements for completing tasks that ensure compliance with the policy. As a result, policies leave room for flexibility and interpretation.
In many ways, policies are expectation-oriented. They’re designed to apply to known activities and one-off events alike, giving employees the company’s perspective to ensure they keep it in mind when making choices throughout their workday.
A procedure is a formalized approach for completing specific tasks or complying with organizational rules. Within a procedure, responsibilities are definitively outlined. Additionally, required actions are clearly listed, giving a robust framework for handling duties or ensuring compliance.
Procedures are incredibly well-defined, eliminating as much ambiguity as possible. As a result, they’re inherently rigid, explaining precisely how an employee would reach a specific desired outcome. That creates uniformity across the organization in relation to those operational areas.
Essentially, a procedure is a formalized how-to guide that offers clear instructions to those who are responsible for various tasks. It’s designed to cover the requirements using a step-by-step approach, ensuring all activities required for task completion are done in a particular manner.
How Policies and Procedures Differ
Policies and procedures differ in one key area. While policies outline what the organizational rules are, they don’t discuss how to ensure compliance directly. In comparison, procedures outline the steps employees must take to comply with the requirements.
For example, companies typically have paid time off (PTO) policies that note how much leave employees can access annually and general conditions for use, such as providing advance notice and securing approval. A PTO procedure covers the precise steps required to secure approval, such as the forms that need to be completed, how to fill out the document, and where to send requests.
There are also other differences between policies and procedures. Policies often change infrequently, as they’re broad enough to apply even with some processes change. With policies, the focus is typically on outlining priorities, goals, or expectations, allowing them to remain relevant over time.
With procedures, change isn’t uncommon. Adjustments are made to improve efficiency or adapt to new technology implementations. Procedures are also highly detailed and incredibly narrow, concentrating primarily on how a specific task is accomplished and who’s responsible for handling the associated activity.
How Policies and Procedures Interact
Policies and procedures, while different, often go hand-in-hand. A policy discusses what’s expected and why, while procedures explicitly outline how to accomplish a task. As a result, procedures that ensure compliance with policies are commonplace, reducing any ambiguity and providing a degree of uniformity in critical operational areas. The PTO example above clearly outlines the interaction between a PTO policy and a PTO procedure.
It’s important to note that not all policies have corresponding procedures that discuss how to comply with the rules. Connecting procedures are only necessary when there’s a specific action relating to the policy that all impacted employees must take using a predetermined approach to ensure compliance.
For example, many companies have employee conduct policies that bar alcohol use while on the job. The policy doesn’t require further step-by-step explanation, so there’s typically no company procedure outlining how to abstain from alcohol while at work.
However, companies may have supporting procedures that outline actions relating to policy violations. For instance, managers might have specific step-by-step requirements for addressing an employee that violates the no alcohol policy, ensuring any intervention, disciplinary action, or reporting remains consistent throughout the organization and aligns with compliance requirements.
Why Businesses Need Policies and Procedures
Policies and procedures are essential for businesses for several reasons. First, having them in place creates organizational consistency. Employees at all levels understand what’s expected of them, providing them with either guidance or explicit instructions to ensure they’re acting in accordance with the company’s preferences and priorities.
Consistency creates cohesion. Employees can anticipate how others within the organization will act if they’re all adhering to the same guidance. This reduces confusion while streamlining operations.
Along with reducing misunderstandings or unexpected actions within the company, it also supports broader employer reputations and the brand as a whole. Predictability is typically a hallmark of a strong company culture. Similarly, it creates a sense of sameness and dependability for customers, which is potentially reassuring.
Additionally, policies and procedures reduce liability by ensuring compliance with regulations and laws. For example, disciplinary policies and procedures make sure that managers take actions that align with employment laws in your area. As a result, disciplinary actions are less likely to result in negative consequences for the business, such as wrongful termination lawsuits or unwarranted unemployment insurance claims.
Creating and Implementing Policies and Procedures
When you need to develop and implement a new policy or procedure, using the correct approach is essential. By embracing the proper strategy, the end result is more effective, increasing the odds it will achieve your desired goal. Here’s how to go about creating and implementing new policies and procedures.
Identify the Need and Associated Goal
Typically, the first step companies need to take is identifying whether a policy or procedure is necessary, as well as what it needs to achieve. In most cases, policies and procedures are valuable if compliance requirements need addressing or there’s any confusion regarding how to make specific decisions, company expectations, or how to accomplish various tasks.
The goal of a policy or procedure is to direct employee behavior, either generally or explicitly. Once a need is identified, determine the desired outcome, allowing you to decide whether a policy, procedure, or both is required to reach the target.
Review Relevant Laws and Conduct Risk Assessments
Before creating a new policy or procedure, review related compliance requirements and employment laws. By doing so, you can determine if specific policies or procedures are mandated. Plus, you can ensure that a policy or procedure isn’t illegal in some capacity.
It’s also wise to conduct risk assessments using a bi-directional approach. Examine the risk associated with not creating a related policy or procedure, such as the penalties for non-compliance with regulatory requirements. Additionally, assess whether the policy or procedure introduces new risks. That includes opening up the company to legal action from employees who believe it’s illegal or discriminatory, as well as cultural impacts that could affect recruitment and retention.
Create Well-Defined Formal Policies and Procedures
Policies and procedures are only beneficial if they’re well-defined. While policies often have room for flexibility or interpretation, they need to fully align with the company’s mission, goals, and expectations. Doing so leads to greater organizational consistency, ensuring employee behavior is generally aligned even when there isn’t explicit guidance relating to a situation they’re handling.
With procedures, detail is essential. The purpose of a procedure is to strictly govern how specific tasks are completed. As a result, thoroughness is a must, outlining how activities are done using a step-by-step approach.
Get Support from Enforcing Parties
Before implementing a new policy or procedure, it’s wise to get support from parties responsible for enforcement. Typically, this includes company leaders and managers, though the involvement of other individuals is possible.
Discussing the new policy or procedure with them in advance allows you to answer questions and provide insights into why implementation is necessary. Additionally, it gives others opportunities to offer ideas for refinement if any part of the policy or procedure is ambiguous, ensuring the end result is clear before it’s formally put into place.
Communicate with and Train All Impacted Personnel
Once a new policy or procedure is developed, communicate with all impacted personnel before implementation. Let employees know why it was designed, what it will achieve, and when it will become part of the company’s approach.
Focus on clarity and transparency when it’s first presented, introducing it using simple language. Additionally, take steps to ensure the information about the new policy or procedure isn’t overlooked, such as by marking the email as high-priority or presenting it in a location that’s hard to miss, such as a large banner on your intranet page.
Make sure you also provide employees with guidance regarding who to contact if they have questions. If managers are well aware of the policy or procedure’s nature, you could have them schedule team meetings to dive into the topic further and address concerns.
Beyond that, it’s wise to offer training for new procedure implementations. Options like videos or webinars can show employees that need to complete the activity using the outline method precisely how to do so. As a result, that initial exposure can make transitioning to the procedure less daunting.
Additionally, train any personnel involved in employee onboarding on new policies or procedures. The goal here is to ensure they cover the information in a comprehensive, approved fashion. In turn, new hires will get vital details about the requirements immediately, making it more likely that they’ll comply from day one.
Schedule Future Reviews and Updates
When implementing new policies and procedures, future refinement is often necessary. Employees may discover shortcomings in how either is currently written. As a result, it’s best to assume that changes are required in the coming months.
Precisely when any reviews and updates need to take place may vary depending on the nature of the policy or procedure. When in doubt, plan for the first review in approximately three months, as that typically gives employees enough time to familiarize themselves with the requirements and incorporate new approaches into their daily activities.
If changes are necessary after the first assessment, schedule a subsequent review in three months. If the new policy or procedure seems sound in its current state, waiting six months to a year for the next is potentially an option.
However, make sure a near-year-end review is always part of the plan. Many new regulations are implemented at the beginning of the year. Familiarizing yourself with shifting requirements a few months in advance of those changes taking effect lets your company plan for policy and procedure adjustments, ensuring you’re not left scrambling to adapt.
Additionally, remain vigilant regarding other impacting laws that are implemented at different times of the year. If necessary, prepare to make correlating updates in advance of those new requirements becoming law, ensuring your policies and procedures are compliant at all times.