07/ 10/ 2006
by Charles R. McConnell
Policies are guidelines established to shape and influence behavior to ensure consistency and legality in conducting business and pursuing the goals of your organization. Policies become "formal" when they are committed to writing and published, usually in a manual form. Policies are essentially useless unless formalized. Certainly, "unwritten policies" exist, many of which might be fair and consistently observed; however, unwritten policies have no legal standing, so they are often useless and frequently hazardous. If a particular policy or practice doesn't exist in writing, it can be legally regarded as never existing at all.
Formal policies are important to the modern work organization because of the growing propensity for litigation concerning employment relationships and product and service problems. In addition to being guidelines for practice and behavior, formal policies provide a certain measure of legal protection.
A policy is a statement of what, what the company will do, or what the company's posture or position is relative to some particular dimension of business operation. A policy doesn't ordinarily specify how; how is left to a procedure designating the manner in which the policy is implemented. Consider a simple example involving an ongoing problem plaguing many organizations—sexual harassment. A company's policy might say something like: (The company) will make every effort to provide a work environment free from all forms of sexual harassment. Complaints of sexual harassment will be promptly investigated and appropriate action will be taken as necessary to restore and preserve a nonthreatening environment for all employees, customers and other affected individuals. This is the policy, a clear statement of what. The how, following in procedure form, defines the various forms of sexual harassment, instructs individuals on how to register a complaint, describes the process by which a complaint will be investigated, and specifies the potential consequences stemming from a verified complaint.
Formal policies have several important uses, among which are:
- promoting uniform understanding of the company's expectations of conduct and behavior and affording employees knowledge of what's expected of them
- encouraging consistency in conduct and behavior
- providing standard, repeatable means of addressing particular issues and rendering certain kinds of decisions
- assisting in orientating and training new employees
- affording the company a measure of legal protection against charges of inconsistent or discriminatory practices
To be truly effective, policies must be well-publicized as well as simply published, and they must be applied or enforced uniformly without preference or favoritism. Simply distributing policy manuals or employee handbooks is not sufficient; managers must understand the rationale behind each policy and be sufficiently knowledgeable to explain company policies and enforce them as necessary.
Documenting policies always contains some legal risks. It's certainly possible to get into trouble because of something written into a formal policy, but it's far more hazardous to operate without having formal policies. Vague or unwritten policies, or policies inconsistently applied or enforced, can seriously damage employee morale, and morale problems can, in turn, affect productivity and lead to an increase in complaints or grievances. Also, once formal policies are in place it's necessary to revise them periodically because of changes in laws and operating practices and the ever changing needs of employees. An outdated policy can be as damaging as no policy at all.
Depending on the size and composition of the work force, the broad areas of policy coverage, each of which could include a number of individual policies, may include:
- employee recruitment and selection
- wage and salary administration
- benefits administration
- employee development and training
- employee health and safety
- personnel practices (for example: attendance requirements, performance evaluations, disciplinary practices, leave-of-absence practices and others)
The policy topics that have received the most attention in recent years include:
- sexual harassment, owing to the increasing nationwide attention to this hot-button issue
- age discrimination, one of the two most active categories of discrimination charges (the other is sexual harassment)
- discrimination because of disability, with complaints stimulated by the passage of the Americans with Disabilities Act
- smoking and drugs, both chronic concerns for many organizations
- exposure to hazardous materials, with increased concern driven by "right-to-know" laws
- privacy, for both employees and customers, another issue that approaches hot-button status
- salary and benefit programs changing as employee needs change and laws affecting benefits are passed or amended
A company policy manual need not be an elaborate, expensive publication, especially for a small firm. What is important is that formal policies exist to cover the essentials pertinent to the company. The operative word concerning the observance and application of policies is consistency; policies provide a common direction for everyone in the organization.
