Workplace Policies and Procedures: The Ultimate Guide
Last Updated on January 17, 2024 by Owen McGab Enaohwo
Travelers and explorers have a variety of instruments they use to navigate the world. To date, despite massive changes in technology, a compass remains a vital tool in a rapidly changing world. It shows direction even when the terrain is dynamic. The compass will stay true in deserts, forests, oceans, and mountains.
A business that has a compass for direction is like a skilled traveler. It can leverage its knowledge of the natural business environment to navigate any barrier that it finds on the way to its destination. Besides having a compass as an orienting tool, a skilled explorer also needs a map.
The map helps them plot the distances they need to travel each day. It also determines the best stops and the best sites to explore. To navigate an unknown territory, your business needs to orient its map to a direction before taking its first step into the vast competitive field of business.
In our traveler analogy, the procedure is a map while the policy is the compass. To illustrate this point, when a policy states that a business tracks the usage of internet resources, the procedure answers the how, what, when, and where questions to eliminate any confusion.
Chapter 1: The Meaning of Policies and Procedures
A policy is a high-level law or guideline set by a company’s senior management. Policies point all employees and partners toward a vision, goal, or direction. An organization’s leadership will stand by its policies at all times. They are law, establishing your business’s stand.
The policy is but a statement. It does not offer guidelines on how to get to the destination. Procedures are the road maps that guide employees on implementing policies. The procedure is, therefore, a system of actions that complies with set policies. It provides the steps that all stakeholders should conform to in order to adhere to policies.
Why we need policies and procedures
A business that does not understand the significance of policies and procedures lacks uniformity of operations and is at a high risk of compliance problems. If your organization has recurrent “how do we ensure that this or that issue never crops up again?” situations, it needs policies and procedures. Below are reasons your business needs to create procedures and policies.
1. Regulatory compliance
An error can be fatal in today’s corporate compliance environment. Some businesses have gone bankrupt because of compliance blunders. A simple gaffe that misclassifies an employee’s status or expectations can be all that stands between you and success. Your policies and procedures are your first line of defense in compliance.
Factor in the US Justice Department guidelines on compliance when designing your procedures and policies. Failure to conform to these guidelines could cause heavy fines, loss of business licenses, business failure, or loss of reputation.
A case in point is this Florida construction company’s $53,976 Occupational Health and Safety Administration fine. The business had to cough up this massive fine after the fatal accident of a construction worker. The business was found culpable because it had failed to provide procedures and instructional material in Spanish. Their Spanish-speaking construction workers only had access to English manuals.
Your corporate bylaws will guide employee behavior. For this reason, there should be mechanisms in place that hold accountable any employee who cannot comply with set guidelines. Clear rules ensure that every task holder understands the cost of errant behavior.
Employees and third parties cannot claim ignorance when the policies are straightforward. The U.K. Bribery Act, for instance, has a rigid stance against businesses that work with third parties that engage in bribery and corruption. Bribery risk arising from associations with brokers, agents, and distributors is one of the largest risks to businesses under the Bribery Act.
In 2017, Rolls Royce paid a princely sum of £497.25 million for turning a blind eye to bribery acts committed by third parties. Every employee or business associate should have a copy of your policies in a language they understand.
3. Identify inconsistencies
A company that has working policies and procedures functions like a well-oiled engine. Its transactions and operations are predictable. Consistency of operations places a spotlight on any anomalies.
Functional policies and procedures will bring to sharp relief failures such as misuse of funds, time, or business resources. Failing or outdated corporate policies will, on the other hand, become anomalies, killing morale and productivity.
4. Forge a robust corporate culture
Effective policies and procedures will help create a corporate culture that makes all stakeholders comfortable, assured, and productive. The compass will give direction and the map will guide your employees on their daily activities so that they can meet the organization’s expectations.
Businesses that leverage their guidelines to create a healthy company culture are more efficient, have lower worker turnover rates and compliance failures.
Types of policies and procedures every workplace needs
Putting your policies and procedures down in writing establishes their authority. They become law and keep all employees up to date on their obligations and their rights. Your staff will understand the terrain better, and whenever there is a dispute, the written rules will provide a fair and swift verdict.
Beyond their firefighting benefits, these business rulebooks will reveal your company’s core ethics to potential investors and futures hires. Below are some policies and procedures every workplace needs.
1. Health and safety
A workplace health and safety policy will give rise to systematic procedures that will keep your employees safe and healthy while at work. Well thought out health and safety procedures are all that stands between you and heavy court cases.
Health and safety cases could also affect your reputation in the court of public opinion. They could slow down productivity and create a chasm between you and your employees. Invest in the health and safety of your employees and build trust with them.
2. Equal opportunity
The law prohibits unfair favoritism at the workplace. You cannot discriminate against your employees as per their race, gender, age, disability, or any other protected characteristic. Establishing equal opportunity systems keeps the company harassment-free, promoting diversity and non-violence. Such laws will create a fair working environment and expand your employee and job applicant diversity.
3. Code of conduct
Code of conduct policies and procedures are vital for compliance. Communicate your expectations early and clearly to lower misunderstandings. As an illustration, have a plain policy on paid volunteer time or time off on appointments. If there are no clear-cut policies on workplace conduct, you will have mix-ups with the best-intentioned employees.
4. Leave of absence
Your employees will need time off work for various reasons. They will need a vacation, health, parental leave, or paid time off from work. The law sanctions some forms of leave of work. Your company policy may also offer other kinds of benefits. Have leave of absence rules and policies in place that explain your regulations and limits.
5. Disciplinary action policies
Every business needs disciplinary procedures and policies in place to ensure appropriate and fair treatment of any problems that may arise. A lawyer should review your step-to-step and standardized disciplinary procedures to establish their legality.
Clean disciplinary guidelines will inform your employees of circumstances that warrant action. These policies will make it apparent that you do not condone violations and have remedial treatment for minor offenses.
Chapter 2: Characteristics of Good Policies
Now, a good map is an up-to-date map. Maps become obsolete over time. A business’s direction also is not set-in-stone. You will need to create and refine your procedures and policies over time to provide excellent management, empowerment, and leadership.
Effective policies are your link to business success and its longevity. The best policies have the characteristics below.
In a fast-paced world, your employees are bound to read the information that only applies to them. To this end, write policies that are easy to read and inch-perfect. Use vocabulary that addresses your target audience. Avoid ambiguous terminology and address audience-specific issues to enhance focus in readers.
Avoid bundling up your policy into one huge rulebook, filled with many processes and standards. A dragging policy document is unreliable. Be succinct and support your policies with elaborate procedure documents.
Your policy is your true north in a spinning world, but every so often, you will face change. Your business should be flexible enough to accommodate measured risk. Rigid policies choke innovation.
Your policies and procedures should be clear. If your audience cannot understand the message that they convey, you will have shallow compliance rates.
A policy can only ensure fair legal treatment if it is clear, reasonable, valid, and non-mandatory.
5. Have endorsement
The leadership should empower policies by championing, prioritizing, and investing in them. Management that glosses over or flouts policy deals a deathblow to compliance and policy adherence. Encouragement and observable support, on the other hand, will motivate assent.
Weak policies and procedures can become weapons of control, and their demands can be a burden. They can kill freedom of explosive random thought and action. Such bylaws can sap employees’ energy and encourage mediocrity. You need to ensure that your policies are friend, not foe.
The Mad Men–era types of business policies and procedures belong to the Stone Age, and if you still run by them, you need to update them. Create progressive policies and procedures that encourage performance, passion, compliance, and quality. Updating your business’s bylaws makes you more adaptable to change.
You should have technical, administrative, and physical controls that support a policy’s compliance. Quantify your compliance rates and reprove any lack of adherence to the rule. Policies are meaningless if they are not compulsory.
Have external parties in mind when creating your policies. Subcontracting and outsourcing have become a business trend. Your policies should address your third-party connections and international law. Think through all of your association’s cultural norms and other issues, such as your stance on the environment.
Fields that benefit from procedures and policies
Every business that plans to scale needs policies and procedures for guidance and direction. That said, some sectors cannot run without well-thought-out and up-to-date business bylaws. They include:
Human resource departments
The H.R. department is your business’s main policy development and oversight arm. For this reason, an H.R. department should have equal opportunity, leave of absence, disciplinary action, and code of conduct procedures and policies.
The workplace manager or head of operations office focuses on enhancing efficiency and productivity. Office management offices oversee travel, events, and internal communications. To this end, this business arm needs robust security, cash, supplies, travel, and communication procedures and policies.
Law and legal sectors
Businesses that run legal or law enforcement sectors should have emergency response, security, legal framework, and communication policies.
Good examples of regulations and procedures for the construction industry include project engineering, safety and loss control, quality assurance, site superintendence, and sustainability.
Educational institutions deal with minors and should have policies on their welfare and safety. They should also have statutory guidelines on sectors such as admissions and examinations.
Caregivers and health workers should have ample administrative, human resources, care, medicine, and information management procedures.
Equal opportunity, overtime, recruitment, anti-discrimination, health, and volunteer insurance are some policies that should support the running of non-profits.
Why you need to update your policies and procedures manual
In transforming business environments, processes, like all maps do, become inaccurate or dated. Their continued usage will frustrate your workers. Refine your procedures and policies for accurate empowerment and leadership.
If you need to take your business off the beaten track, have policies and procedures that provide proper guidance and clarity. If your company is on the verge of losing its ethos, turn it around by creating clear, effective, and simple policies. Update your policies when:
- You are working in new geographic markets.
- You have new product lines or acquisitions
- You are working with new technology
Chapter 3: Policies & Procedures Management Best Practices
Writing procedures and policies is not a surefire way to enforce compliance. To improve ethical behavior, identify risk, and stay audit-ready, you need to think over policy and procedure rollout best practices. To illustrate this point, Volkswagen was a highly respectable carmaker before their 2015 corporate fraud incident.
The German vehicle manufacturing business had been installing software in its vehicles to defraud car emissions testing. Before their diesel engines “defeat device” moral and legal drama, the industry had a profound respect for German vehicle engineering systems. The company’s shares were every man’s dream.
This excellent corporate image quickly turned sour and its affiliations toxic. Within no time, the automaker’s valuation diminished, and the backlash began to affect BMW and Daimler. The market anxieties over the debacle almost took down any business reliant on Volkswagen.
There was a disturbing notion that the business’s past exemplary performance was but a farce. The giant carmaker paid $4.3bn in the U.S. and €1bn in Germany as fines for the act. They also had to recall millions of vehicles back to the tune of billions of dollars. V.W. made its first 15-year span quarterly loss that year.
The fraud also left V.W. open to per- car fines from the EPA and legal action from shareholders and car owners. In their defense, they owned up, had resignations, and made a pledge to win public trust back. Volkswagen has completed its three-year-long compliance monitorship for the “diesel gate” fraud.
As per the courts, they are now well-equipped to implement their compliance policies and procedures. Few businesses would survive such an onslaught. It is easier to nip any issue in the bud by ensuring that your policies and procedures are in operation and not mere words on paper. The best practices in procedure and policy management include:
1. Proactive reviewing of policies and procedures
Do you know that 65% of businesses only have a reactive or basic management program for their policy and procedures? They lack up-to-date business laws that lack conformity to new regulations. These reactive rulebooks do not outline business expectations, adversely affecting organizational behavior and culture.
A proactive management program maintains up-to-date policies and records, keeping all problems at bay. If your stance is reactive, you will only review your policies when in deep water, as V.W. did.
2. Use software to automate reviews and build a policy and procedure repository
A mature policy management program requires automation to enhance access to the latest business regulations. They will keep your staff up to date in a rapidly changing world of business. A reactive management policy is manual and has low version control, audit trails, or effectiveness metrics.
Twenty-three percent of businesses have over 100 policies. Thirty-five percent of them have over 100 procedures. A manual policy management program for a vast repository is unreasonable. To ensure that your automated system runs smoothly, have a compliance officer in place. Also, conduct comprehensive cyclical risk profile assessments.
3. Ask for certifications or attestations
To ensure compliance, some businesses require their staff to either attest or have annual certifications. Your business can enhance this management practice by encouraging vendor contracts and third-party validations.
4. Create a policy on policies
Have one document that guides the distribution and drafting of policies. It will give your entire procedures and policies one format, making it easy to read and access.
Tools and considerations for creating a policy and procedure
Tools will ease creating, reviewing, and updating your procedure and policy documents. Some tools available for this purpose include:
Microsoft Word, Excel, or PowerPoint
Word processors, spreadsheets, and simple graphic programs can help draft and format your policies and procedures. These tools are easy to use and very accessible. They, however, have the distinct disadvantage of plagiarism and lack of collaborative editing features. They have minimal real-time editing systems and low-security features.
You can purchase or build manual templates for policy and procedure creation. They are structured, saving you time, and they help create standardized document drafts. That said, templates are highly inflexible, making it difficult to review, update and have real-time collaboration with other team members when drafting policies.
Automatic policy management platforms
These purpose-built policies and procedure-creation platforms have many advantages to Microsoft software or templates. First, the policy creation platform has templates ready for use. They also have real-time collaboration and document auditing features. Their security is top-notch and will work as a central hub where your staff and third parties can access your business bylaws and undergo training.
How to communicate workplace policy changes to your employees
We have established that review and update of policy and procedure are vital to the success of a proactive management program. Whenever you review your business bylaws and procedures, you also need to update your staff and all stakeholders on changes so that they also can stay up-to-date.
Failing to inform them of any new updates could have financial or legal ramifications for your company. To this end, below are steps you should take when you have a new policy or procedure information.
Announce that there are changes
Clarify that you have policy updates by using effective communication channels such as email or notice boards. Share the updated documents via your intranet, email, or a secure portion of your website where applicable have hard copies that replace outdated documents.
If the new procedures are too complex, you will need to institute training to ensure that all stakeholders have a firm grasp on the updates.
An anonymous hotline will provide confidential information and feedback that will help boost review and the quality of the policy and procedure. Such channels can also help identify risk. If the staff has voiced concerns, address the issues that arise honestly and with openness.
Let employees sign off on updates or new policies
As compliance laws become stricter, all documentation must have proof of reception and readership. Allow employees ample time to go through new policies and procedures. When they have signed that they have received communication on changes from you, keep the signed-off copy in their personnel files.
Chapter 4: Case Studies on the Importance of Policy and Procedure Review
Some businesses avoid fundamental transformation to their policies. Not so for Starbucks. The coffee giant does not etch its business policies in stone. Starbucks is currently changing a policy that has been part of its culture for decades to help it adapt to a new business environment.
To this end, the coffeehouse announced its “transformational phase” in 2020, kicking off the closure of hundreds of its stores. Starbucks is reviewing its “third place” policy that has been a vital part of the brand’s success.
The American multinational’s fearless stance toward change started back in 2007, just before the global recession. The leadership stayed true to Starbucks’ experience of connection, comfort, and respect for coffee.
This kept the business free of commercialism, focusing instead on the smells and sights of roasting coffee and the attraction of their traditional coffee preparation processes. They shut down close to 7,000 stores for their partner “Espresso Excellence Training” program.
This program trained and certified over 135,000 baristas in the art of the perfect espresso cup. They also focused on building a connection with the local community. Their policy change has made Starbucks the most relevant business in coffee.
The recent review of their successful “third place” policy and the introduction of the “Starbucks Pickup” might sound ill-informed, but the business has an ace up its sleeve: data. In the last decade, the management has been collecting data on customer preference. They noted a change.
While lots of the clientele love to meet up at Starbucks for coffee with friends, long before the pandemic, 80% of their orders were “on-the-go”. The business, therefore, began to re-examine its customer experience policy. They created procedures that would enhance the order-ahead and mobile app payments for pickup or deliveries via Uber Eats.
The Starbucks case study goes to show the importance of a proactive policy review process. It also shows that the past pandemic is but an opportunity to realign your business direction by creating effective data-backed policies that will set your business in the right direction in the next decade.
How SweetProcess supports policy and procedure creation and review
Like Starbucks, Onogo’s e-commerce business has had to adapt to keep its position and relevance in a competitive market. Onogo is a successful consumer business retailer. They have an elite Amazon seller status and are a part of Amazon’s top 1,000 global sellers.
Onogo also had a reform period spearheaded by Florinela Serban, their head of operations. Florinela needed to lead the business’s streamlining process that would help meet the changing and growing demands of its partner and customers. Onogo needed a business structure with a robust workflow system.
The company needed processes that would guide and equip their staff and partners, directing them on what to do to meet the business’s objectives. Florinela forewent Google Docs, templates, or Microsoft Office software documents because they are static and limited in functionality.
After much research, Florinela Serban chose SweetProcess, a process mapping and improvement platform to help her team create a company policy and procedure management system. SweetProcess also became a central repository for all of Onogo’s workflow documents. This would ease access, collaboration, and communication for the long haul.
Florinela and her process draft team created policies and processes that would guide growth and oversee efficient hiring. SweetProcess’s easy-to-use interface and tons of dynamic, useful features encouraged readership and compliance to procedures.
Some of SweetProcess’s features include:
- The procedure, process, and policy documentation workflows that ease standardized business handbook creation.
- Task assignment features that encourage collaboration amongst the procedure draft team. Onego’s team uses this tool to recommend improvements during the drafting and review process.
- One of the platform’s best features is its real-time collaboration ability. Your policy creation team can amend, discuss, and submit changes for approval in real-time.
- SweetProcess also works as a knowledge base. Your staff only needs to log onto the platform when they need up-to-date business information.
- The platform keeps your procedure and policies secure and tamper-proof by restricting editing or viewership access where necessary.
- SweetProcess has the ability to embed videos, images, process maps into your policies and procedures. The visual and sound elements will bring your business’s documents to life and ease-of-comprehension of difficult concepts.
- SweetProcess integrates with over 1,000 other useful apps.
- Some of SweetProcess’s security features include its Single Sign-On and Two-Factor authentication
Leveraging SweetProcess’s features, Onogo created easy-to-use procedures and a decentralized knowledge base. The ease of access lowered employee training and onboarding costs and time. Onogo is now running an efficient outfit. High-quality control and assurance procedure compliance rate keep Onogo moving like a well-oiled engine.
SweetProcess has a 14-day free trial and a fair billing process, including that we don’t require a credit card to sign up for your trial.
Companies with progressive policies
The dynamics of businesses are changing with closed-off cubicles becoming outdated. Employers are implementing policies that make their workplace a happier and healthier place to be. A dedicated policy and procedure design team only needs policy and procedure mapping software like SweetProcess to kick off the level of organizational transformation felt in the businesses below.
These are just but a handful of companies that have created progressive policies that have positively changed their organizational culture.
Dropbox has created a collaborative work environment through its adaptable work schedule policy. The file-hosting business has a Hack Week that encourages a return to innovation and professional interest. The Hack Week produces vital business development ideas from a relaxed and fun team spurring passion and creativity amongst staff.
To enhance gender balance amongst its staff, Accenture has a 50-50 gender balance policy that seeks to have its workforce in equilibrium by 2025. The policy has borne much fruit, and 43% of its global workforce is female. Some procedures and policies in place that support its diversity policy include mentorship, flexible scheduling, remote working, and employee resource groups.
Microsoft is allowing its employees the freedom to work from home post the pandemic. Their hybrid workplace policy allows their staff to work from home for half of their working week. The managers can also review and approve a request for a fixed remote work setting should the employee opt for it.
Policies smart companies will keep in the new decade
Laws are changing in response to the growing safety concerns, transforming production systems and consumer behavior changes. Some policies and procedures that your business will need to revise or create in the new decade include:
- Paid sick leave as more employees stay at home over COVID-19 complications
- The Black Lives Matter movement recognition has become part of the workplace environment. Businesses, therefore, need to recognize Juneteenth as part of the holiday calendar.
- Workers are adjusting to remote working environments so there is a need to institute a work-from-home and telecommuting policy for flexibility.
- There has been a shift to telehealth because of the pandemic, and workers need health insurance that covers these online appointments.
- As per the U.S. Supreme Court orders, LGBTQ+ staff should have policies that protect them against discrimination.
To navigate unknown territory, an explorer needs to orient their map to a compass before making any movement. Are your policies and processes misaligned or outdated? You need to bring them up to date to protect your business and to ensure growth.
To help you build your own successful policies and procedures, check out these two resources for free!
1. Download our resource “How to Plan and Implement Policies and Procedures” here.