Understanding the Importance of Policies and Procedures

September 27, 2008 By Mary White

Is your company too small to have formalized policies and procedures? This is a trick question. There is no such thing as being too small to have formal, written policies and procedures. Every business needs to have standards for employee, contractor, and customer relations policies and procedures. Failing to create policies and procedures that you – and everyone who works with you as an employee, contractor, or agent—fully understand can make it difficult for you to deal with tough decisions that need to be made and can put your company at risk.

Employee Handbook
Before you hire your first employee, you need to develop an employee manual that specifies your company’s policies and procedures. Every item in the publication needs to be written so that it is consistent with all applicable laws and regulations. It also needs to address the issues that commonly come up in the workplace, such as:

Attendance policy
Time off
Substance abuse (Drug Free Workplace)
Sexual harassment
Grievance process
Benefits eligibility
Chain of command
Equal Employment Opportunity statement
Additional details about employment policies and procedures

In addition to addressing specific policies and procedures, your employee handbook also needs to include general information about the company, so that employees can see in writing basic facts about what it is that makes the place they’ve chosen to work unique. Most employee manuals begin with a quote of the organization’s mission and vision statements. These publications also usually include a brief history of the organization, an overview of products and services, and an organizational chart.

Each employee should receive an employee manual at the time he or she starts work, and you should give him or her time (on the clock) to read the publication. Have every employee sign off on an acknowledgement form that specifies that he or she has read and fully understands the document. Keep the original, signed statement in each worker’s personnel file.

Customer Policies and Procedures
Everyone who works for you or who represents your organization needs to have a firm understanding of your customer policies and procedures. Your statement of customer policies and procedures needs to detail your customer service philosophy, refund and exchange policy, payment terms, etc. You want to provide individuals who will be interacting with customers on your behalf with the information they need to act quickly and decisively on behalf of your customers so that you enjoy the greatest potential for establishing a reputation of being an outstanding service provider. When it comes to expecting employees to provide exceptional service to your customers, keep in mind that knowledge is power.

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