Policies & Procedures
We document and implement your policies and procedures.
A policy document must be approved by the highest delegated authority. For example, the board (for all new or any major amendments to existing governance policy documents or to firm-wide operational policies which have significant risk, compliance or cost implications) or the CEO or a delegated authority (for new or major amendments to existing operational policy documents which do not require board approval).
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Why policies and procedures?
The rationale for a policy framework policy is to ensure that organisational policies are established, applied, monitored and reviewed consistently and appropriately across the organisation. Such a framework will make all organisational policies subject to a formal approval process and ensure all policy documents are stored in a centrally maintained document management system. Written documentation is essential for effective and consistent communication within organisations, and the provision of clear, written policies and procedures that reflect current practice and community expectations assists in accountability. Further, written policies and procedures provide tangible evidence of intended practices that are consistent with the organisation’s values, and should be regularly reviewed, evaluated and updated.
The Value Propositions
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 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.
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.
Company policies often set expectations for employee behaviour 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.
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 labour-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.
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.
Hold employees accountable
Policies and procedures guide employees on how to behave. So when they don’t behave as instructed, you now have a mechanism to hold them accountable: they weren’t following policy and procedure, as they’d been told to do. This does drive up the importance of clear policies, so employees can’t claim they didn’t know what they were supposed to do. Fundamentally, policies and procedures allow the organisation to hold employees (and third parties) accountable for unacceptable behaviour. That’s just as important as encouraging acceptable behaviour.
Build a stronger culture
Ultimately, the most important reason to have policies and procedures is that they help to build a stronger corporate culture. When all employees understand how they’re supposed to go about their daily routines, and they understand the core ethical values and priorities behind those policies and procedures—that builds a more unified, trusting culture. Once an organisation has a culture like that, all manner of benefits emerge: greater efficiency, lower employee turnover, and yes, fewer compliance failures. Traits like those can provide an invaluable strategic edge over your competitors. So as vague as the phrase “policies and procedures” might be, strong policies and procedures are hugely important. Whatever the time and effort to get them right, it’s worth it.