What Are Policies and Procedures?
What every organization needs to operate with excellence.
- The difference between policies and procedures.
- Why policies and procedures are important.
- The importance of policy management.
No matter the industry, every organization needs policies and procedures to operate effectively. Policies and procedures are among the first things company leaders need to establish.
They should grow and change with the company. But what are policies and procedures? And why are they so important?
What's the Difference Between Policies and Procedures?
What is a policy?
It’s important to understand the difference between a policy and a procedure.
At the core, policies communicate an organization’s culture, values, and philosophy. They cover what employees can expect from the organization (employee benefits, vacation policy), what the company expects from employees (code of conduct, confidentiality agreements), and what customers and the community can expect from the organization (customer service policies).
They also lay the groundwork for the work culture, and provide some guidelines for decisions and actions.
But good policies are more than just lists of rules. They should show employees the bigger reasons behind their jobs and lay out some ways to measure success.
What is a procedure?
After establishing policies, procedures are the natural next step.
Policies set some parameters for decision-making, but leave room for flexibility. They show the “why” behind an action.
Procedures, on the other hand, tell the “how.” Procedures provide step-by-step instructions for specific routine tasks.
They should outline who is responsible for each task, what steps they need to take, who they need to report to, and so on. Certain procedures may even include a checklist or process steps to follow.
A good example of this difference is requesting vacation time. The vacation policy determines how much time an employee is eligible to take, while the procedure lists the steps involved to get approval for the specific days off or what factors determine who gets priority days off.
Establishing these specifics ensures that employees know what to do and keeps the organization running even when key employees are out of the office.
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Why are Policies and Procedures Important?
Together, policies and procedures guide an organization and reduce liability risks. They promote consistency across the organization—both for employees and for customers.
Policies ensure compliance
Every industry has its own set of laws, regulations, standards, and best practices. At the most basic level, policies and procedures ensure your organization complies with federal, state, and local laws.
Many state laws dictate that companies have specific policies prohibiting discrimination and harassment. Every organization should cover these and other core employment policies in their employee handbook.
This will help protect against lawsuits, reduce liability, and ensure their organization is able to keep doing business.
Of course, complying with employment law is just the beginning. Policies and procedures should go above and beyond legal standards. Good policy binds organizations to the best practices of their industry.
Policies and procedures streamline internal processes
Especially as companies expand and evolve, processes—the steps taken to bring about a particular outcome—can get convoluted.
Policies and procedures help ensure that internal processes make sense and achieve the desired end. This frees up employees to provide more value to customers.
Yet this only happens if administrators regularly review and update policies and procedures to fit the organization’s changing needs.
Policies and procedures document how things are done over time. Thus, they can help an organization’s leaders improve processes.
For example, the policies for a health care center may dictate that all employees receive 20 training hours each year. When the center first started with only a few employees, they did in-person staff training.
But as the center hires more employees, making sure everyone gets in the classroom for training gets more complicated. It starts taking up administrative hours and dollars that could be better used elsewhere.
If administrators are regularly reviewing policies, procedures, and practices, they may change training procedures to better fit the clinic’s needs. They may decide to adopt a software tool that allows for online training.
Policies help organizations navigate incidents and crises
Policies and procedures can help prevent workplace incidents by making sure the proper safety measures are in place. If an incident does take place, good policies and procedures help right the ship and get operations back to normal as quickly as possible.
For example, if a workplace accident happens, procedures make sure the employee and their manager know what actions to take. This might include which forms to fill out, what incidents qualify for workers comp and how to apply for it, and so on.
Reviewing policies, procedures, and incident reports can help company leaders identify what went wrong. They will be able to take steps to prevent similar accidents from happening in the future.
Having the proper policies and procedures in place ensures that the incident doesn’t get overlooked or turn into a crisis that could threaten the organization.
A workplace incident happens internally and can interrupt day-to-day operations. But a crisis usually happens externally and can be harder to anticipate.
A crisis—ranging from a natural disaster to a faulty product to a lawsuit—can threaten the organization’s finances, reputation, or ability to continue providing services. Some experts estimate that a large company will face a crisis at least once every seven years.
Policies and procedures can help guide an organization’s response to and recovery from a crisis. For example, in the case of a PR crisis, good customer service, social media, and communication policies can help the organization reduce potential damage to their reputation.
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Every Industry Needs Policies
Law enforcement needs policy
Policy has always been important in law enforcement. But keeping up-to-date policies has become even more essential in the last few years as police accountability has become a hot topic.
Law enforcement is inherently dangerous, complex work. Police officers need to have the proper training and access to policies in order to protect themselves and those they serve. Policies on things such as use of force can help build trust between police departments and the communities they serve.
Some departments even choose to make some policies public in order to promote police accountability.
Fire needs policy
The ability for firefighters to know and follow procedures can be a matter of life or death. Firefighters need to be able to work as a team to respond to emergencies quickly and effectively.
Policies on training, medical screenings, and equipment maintenance make sure firefighters are ready to do their jobs well. Other policies set guidelines to help firefighters make decisions in dangerous, high-pressure situations.
Retail needs policy
Retail policies and procedures dictate how a store will run. They outline business and store hours, general practices, guidelines for ordering more merchandise, and more.
Policies and procedures on things such as credit, returns, security, and bank deposits can help retail organizations protect themselves from losses or theft.
Policies also help retailers grow by ensuring brand consistency.
Retail policies make sure employees know how to treat customers, how to handle common questions and complaints, and how to represent the brand well.
Healthcare needs policy
Healthcare organizations face a lot of liability risks. Policies and procedures help healthcare organizations limit those risks, ensure compliance with regulations, and provide quality customer care.
Procedures help standardize practices and provide a basis to measure quality and improve services.
The Importance of Policy Management
Reviews and updates
Policies and procedures should grow and change with an organization, adapting to the organization’s needs and industry standards.
Most experts suggest that organizations review and update policies at least once a year. Some policies may need to be revised even more often.
Updating policies should be collaborative. Administrators should work with leaders, employees from different levels of the organization and representatives from groups who will be influenced by the policies.
The collaboration process doesn’t have to be difficult. PowerDMS’s policy and procedure management tools allow company administrators to create workflows to collaborate on a new policy draft.
This lets them track all changes, control who can edit and view the draft, and see the complete history of every document.
Once administrators are ready to publish an updated policy, PowerDMS automatically archives the old version, eliminating the confusion of conflicting versions of policies and procedures.
Employees should be able to easily refer to policies and procedures at any time. Flipping through a physical policy manual is usually not practical during a critical situation.
PowerDMS provides organizations with a secure, centralized online location for policies and procedures. Employees can access policies at any time from any mobile device and pull up what they need with a quick keyword search.
Driving employee accountability
Of course, making policies and procedures available doesn’t guarantee that employees will read them. New employees should be trained and tested on policies and procedures during orientation, but even long-time employees will need reminders of policies and procedures.
Organizations should make sure all employees sign off on policy updates to make sure practices line up with standards.
PowerDMS allows administrators to distribute policies and collect electronic signatures with a couple of clicks. They can even assign quizzes to test understanding and retention.
Policies and procedures provide a foundation for every organization’s operations. Proper policy management is key.