Business Policies & Procedures
Business policies and procedures are the foundations of a well-functioning business. Policies encompass the principles your business adheres to, while procedures are the specific steps taken to address those policies. Combined and placed into a manual or employee handbook, these rules and regulations will protect both the business and the employees.
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The Facts
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Every business should have policies and procedures that address the following five areas: (1) Overall employee expectations. (2) Employee compensation. (3) Roles and responsibilities. (4) Customer service. (5) Financial and quality controls. In addition, a formal grievance process that would reduce the possibility for bias should be included to address any problems that arise.
Function
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The primary purpose of a formalized policies and procedure manual is for dispute resolution. Whether between management and an employee, between two or more employees or between a customer and the business, policies and procedures exist to provide guidance as to how the business as a whole stands on certain issues. In some case, such as with discrimination and harassment, laws exist that require employers to address certain issues and provide a means of resolution.
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Effects
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In addition to providing a guide for conflict resolution, policies and procedures reduce the possibilities for employee misunderstandings and errors. By creating a single document that employees can refer to, there should be no unpleasant surprises. When all members of the business team are operating together, customers also know what to expect and become loyal followers.
Benefits
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By creating a policy and procedure manual, you may learn about your business by looking at it from a different perspective and in such great detail. You may also experience peace of mind knowing that if you were out ill for an extended period the business would still function in a consistent manner. Even if you are a sole proprietorship and work alone, establishing formal guidelines will assist you in making decisions with customers and vendors. Instead of making decisions in a crisis situation, you will have a well-thought-out policy that takes many issues into consideration.
Considerations
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If you're looking for guidance in writing policies and procedures for your business, look toward trade associations for industry-specific tips. Small organizations and family businesses may find formal policies and procedures cumbersome and may be more interested in creating several documents that reflect legal aspects and general operations based on the company vision. Finally, if you have a policy or procedure you won't follow all of the time, don't include it. Creating a precedent that policies will not be followed 100 percent of the time could land you and your business in legal and financial trouble.
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