What is the purpose of policies in the workplace?

Enhance your knowledge of organizational governance with PowerDMS. Explore the core purpose and impact of workplace policies on your workplace culture.

December 22, 2020

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Regardless of size or industry, every organization needs to establish a clear set of policies to help guide operations. But what, exactly, is a policy?

Policies communicate an organization’s culture, values, and philosophy. They cover what employees can expect from the organization (employee benefits, vacation leave), what the company expects from employees (code of conduct, confidentiality agreements), and what customers and the community can expect from the organization (customer service).

The purpose of policies

Now that you know what a policy is, it helps to know the purpose of a policy. Rather than thinking of policies as a set of rules to follow, think of policies more in terms of their purpose and benefits for both the employees and the organization.

Set clear expectations

While policies offer a variety of benefits, the primary goal they accomplish is to put in writing what the company expects from employees in terms of the behavior, actions, and processes they take in specific scenarios.

This clarity allows employees to know and understand how they should respond according to the mission, vision, values the company establishes. In a nutshell, policies take the guesswork out of what employees should do.

When they are written in clear, easy-to-understand language, policies explicitly outline the company’s expectations of employees at every level. Different rules do not exist for different levels of employees. Instead, every employee must follow these guiding principles in the day-to-day routines of their jobs, which is the overarching purpose of HR policies.

Create consistency throughout the organization

Clarity in the company’s guidelines leads to everyone operating according to the same principles and guidelines. In turn, this creates consistent experiences and processes, both internally among employees and externally regarding interactions with customers, vendors, and the general public.

This is especially true for new employees as clear policies help them learn quickly the expectations.

The same is true for company procedures. While policies set boundaries for decision-making, they do provide a bit of flexibility. On the other hand, procedures provide step-by-step instructions, checklists, or processes for specific, routine tasks.

Both policies and procedures help new employees quickly acclimate to the company’s values and mission as well as for specific ways they should do specific tasks.

Learn more about the difference between policies and procedures.

Reduce risk

Establishing the expectations and consistency outlined above allows leadership to ensure the company communicates all laws and regulations to employees. Plus, it ensures employees both understand the policies and know how these policies apply to their day-to-day jobs.

The result? When an organization clearly establishes expectations in writing and incorporates them into the fabric of the corporate culture, this reduces the number of fines and other legal risks for the company.

Building this culture of organizational accountability requires a concerted effort on the part of leadership, but it mitigates risk and drives compliance, which is every employee’s responsibility.

Improves employee performance

Clear policies allow leadership to institute and solidify best practices throughout the organization. This can be accomplished through both big-picture efforts – such as mission statements, which should be included in the policy manual – as well as through more detailed and specific policies and procedures.

Beyond mere documents, policies set forth the company’s mission, vision, values, and culture, codified into a written format for employees at every level to access and follow. As living documents that change to reflect current needs and risks, policies are truly the heartbeat of an organization.

How? For starters, these consistent guidelines help build trust among employees, helping to drive accountability.

Developing that accountability mindset empowers both individuals and teams to be more collaborative and productive, allowing them to more effectively contribute to the organization’s overarching goals. Thus, fostering this culture of workplace accountability through the guidance of clear policies helps yield a high-performing company.


Set high standards for all employees

Another purpose of HR policies? It sets the bar high for the standards the company expects employees to live up to. For example, a solid foundation of company policies should address areas such as code of conduct and ethics, anti-harassment, and diversity.

It’s one thing to talk about the organization’s stance on these issues, but it’s another to codify these standards and expectations in writing for all employees. Such policies should clearly delineate the consequences and actions the company will take if an employee violates these rules and policies.

Again, this circles back to all the goals mentioned above, with all of these elements feeding into and off of each other.

What policies are not

Make no mistake – policies and procedures are not a cure-all. Just because something exists in a policy manual doesn’t mean that every employee fully understands and follows every policy.

No matter how terrific your policies are, they are no substitute for adequate employee training and supervision, topped off with a deeply ingrained culture of ethics and compliance.

Think of company policies and procedures as tools that you can use to achieve all of this, but you cannot simply hand a policy manual to new hires and expect them to fully comply with everything. Policies, therefore, are just part of the equation.

How to implement effective policies

Knowing what policies are, as well as their goals, provides a solid base to move forward with creating and implementing effective policies in your organization.

Gather your policies into one system

A good first step involves collecting your existing policies together to see what currently exists.

Typically, policies are siloed into different departments, which often use different terminology, use different systems to keep them updated, and probably use different templates and formats. This can be a nightmare when aiming for organizational consistency.

Therefore, the best thing you can do to improve the effectiveness of policies is to make them consistent in terms of a common template, format, and language. Also, carry this level of consistency through to where you store your policies by corralling everything into one central location so employees can easily find and access the policies.

Establish a policy oversight and approval process

Leadership needs to provide clear authority to a team of people to manage the policies. This could be a single person, such as a Chief Compliance Officer, or a team of people consisting of representatives from multiple departments.

Regardless of who is at the helm of your compliance efforts, this team should work with subject-matter experts and management to establish these company policies.

With a compliance team in place, the next logical step should involve outlining clear approval processes. What needs to be approved by department heads, or legal, or the CEO, or even the board? And when should this happen? Establish the approval process and timeline up front to avoid any surprises along the way.


Track when employees were given policy revisions

When it comes to accountability, employees can only be held accountable to what information they were given at the time. That is why it is so important to be able to track when employees received specific policy updates or revisions.

To address this issue, many companies require employees to sign off on policies, attesting that they received, read, and understood the policy.

Thus, it’s imperative to be able to pull up the specific wording of the policy employees are signing.

Why? If an issue or a violation occurred, it will be evident what the relevant policy was at that time.

Train to your policies

The effectiveness of your policies rests largely in how well your organization communicates, and trains to, your policies.

Employees need to understand not only what to do, but also why these guidelines matter to them. Plus, they need to know where they can find this key information.

Your company must provide clear, consistent, on-going communication regarding new policies and any updates and/or revisions.

One way to solidify your communication efforts is to tap into the power of training, which helps educate employees on the company’s expectations and reinforce concepts outlined in the policies.

If your training aligns and even covers the specifics of the policy, it is much more likely that the employee will comprehend what it says, be able to apply it to their job, and comply. Training to your policies offers another way to boost the effectiveness of the policies themselves.

Communicate policy changes when they occur

The business landscape changes all the time, with new risks and liabilities constantly popping up. This requires a nimble approach to policies, allowing your organization the ability to get ahead of issues by changing relevant policies as needed.

Say goodbye to the days when your company waits for an annual update to its binder full of policies or even lumps multiple policy revisions into a quarterly update. The regulations change too frequently and the risks are a moving target, so you do not have the luxury of waiting to update your policies.

You need to communicate the revisions, citing both what has changed and what has stayed the same, which actually helps comprehension.

Because of the fluidity of ever-changing rules, regulations, threats, and risks, it seems antiquated, if not outright risky, to rely on printed policy handbooks and manuals.

They are too cumbersome and costly to update with any speed or regularity. You need a modern, digital solution that gives you the flexibility to update, distribute, and track your critical policies.

Enter, PowerDMS, a complete policy management solution for modern-day problems. We securely host, manage, distribute, and track all your policies from a single, searchable system.

This means employees never need to guess where to look for the latest information, saving time and eliminating frustration. And this gives you a simplified-but-cutting-edge system to manage the entire creation, review, approval, delivery process.

The bottom line? The purpose of policies is to help your organization tie together your mission, vision, values, and culture into clearly written and easily accessible documents for all employees to take to heart.

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