Why Do Companies Write Policies & Procedures?

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Policy and procedure documents help keep a company organized and effective.
Policy and procedure documents help keep a company organized and effective. (Image: blue binder image by timur1970 from <a href='http://www.fotolia.com'>Fotolia.com</a>)

A company’s policy and procedure documents are a key factor in maintaining efficiency, consistency and clear communication. Some companies opt to create individual documents for different procedures, while others gather all policies and procedures into one manual that they present to each employee. Well-documented policies and procedures provide benefits to employees, clients and the company.

Set Expectations

Company policies often set expectations for employee behavior on topics such as attendance, timeliness, dress code, safety regulations and more. Policy and procedure documents often set forth the company’s responsibility to its employees, including equal opportunity hiring, vacation and sick time, family leave, etc. Employment contacts and offer letters may reference the company policy and procedure manual (or employee handbook) and state that the employee agrees to abide by the rules set forth in the manual. Some companies require new employees to sign a form indicating that they have received the manual.

Encourage Efficiency

The most efficient way to accomplish a goal is the ultimate basis of company processes. This may not be the easiest or fastest way, but it is the least labor-intensive way to meet the goal without sacrificing quality, incurring risk or ignoring any regulatory requirements. Theoretically, if every employee follows the set procedure for every task, every time, the company will meet all goals in the most efficient way possible. In reality, the preferred procedure may not be possible every time, so many processes actually include a specific policy about how to handle such a situation. This could include approval from a higher level or simply additional documentation.

Encourage Consistency

Consistency generally breeds efficiency. When people do things the same way every time, they eventually become able to complete the process in a shorter amount of time, which means they can do more work in the same amount of time. Consistency also breeds confidence. Consistent methods assure clients that the company will handle their accounts with the same care and precision during each interaction. Consistency helps employees and clients alike know what to expect when faced with a given situation.

Stay Legal

Laws, regulating bodies or insurance companies require companies to document and distribute some processes and procedures. For example, most states require companies to have a set process for handling workers’ compensation claims and to make sure that all employees know how the process works. Insurance companies and regulatory agencies such as OSHA require companies to detail safety policies, especially in a manufacturing environment. Including this information in a process and procedure document allows the company to meet distribution requirements.

Communicate Effectively

A company may have many employees, multiple locations and/or employees that work different shifts. Employees will leave the company and new employees will join the company. The easiest way to communicate expectations and processes to all employees without missing anyone, leaving information out or being inconsistent is to write and distribute a formal policy and procedure document. Making sure that everyone has access to the same information also helps protect the company against unfounded wrongful termination suits.

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