Policies Are an Important Part of Business

Polices are a way for a business to guide how they operate, not just on a long-term basis, but also on a day-to-day basis.

Policies offer a number of benefits to companies. Having policies in place:

Helps mitigate some exposure to liability

• Demonstrates to current and prospective employees that the organization has thought about the needs of its employees and has developed programs to address those needs
• Helps managers organize how they’re going to address an employee’s question, since they have a policy to refer to
• Keeps everything consistent so you don’t have managers coming up with their own policies or employees questioning why policies are different from manager to manager

When to Develop a New Policy
Obviously, as soon as an entity decides to go into business, they should develop some very basic policies of how things will operate. This is especially important if the business is going to be hiring employees.

Here are some situations when a new company policy or a policy re-evaluation might be warranted:

• When a business decides to hire an employee.
• If business operations change; for example, the business will be or has been acquired by a new company or the business has decided to change from centralized operations to decentralized operations.
• If there has been a major change in the way the business runs itself; for example, the company used to operate Monday through Friday, 8 hours a day and now needs to operate 24 hours a day, 7 days a week.
• If the environment the company does business in changes; for example, this may be due to the introduction of new technology/machinery or the introduction of competition from international markets.
• If laws change outside the company—either local, state or federal.

Process for Implementing Policies
Once a company has established its overall policies, the next step is to figure out what the processes or the procedures will be in order to implement and administer the polices.

To help you understand the steps, here is an example.

A company decides that they’ve hired enough employees and now they want to write a vacation policy. What they need to do is:

• Look at Options—In this case, get ideas of the various types of vacation policies that can be implemented. Determine if separate policies for vacation, sick time and personal time will be implemented or if a combination policy, commonly referred to as Paid Time Off (PTO), is preferred.
  
  
• Review Applicable Regulations—Consult with a resource who understands the laws related to the policy. Get their input on the implications relative to the vacation policy. The resource may be an attorney or a Human Resources (HR) professional.
  
  
• Look at Costs/Budget—In this case, the amount of time an employee is off for vacation will have associated costs for the organization in terms of employee pay as well as pay for the other staff who will handle the duties of the employee on vacation.
  
  
• Administration—Who’s going to administer it? For vacations, usually it’s someone internally who will have the responsibility to ensure that the records are maintained properly and tracked accurately. This individual will also have the role of providing guidance to the organization’s managers when there are questions about interpretation of or clarifications about the policy.
  
  
• Method or Process—How are they going to administer it? In the case of vacations, is it going to be a manual process where somebody is tracking everyone’s vacation time? Or will they buy computer software to automatically track it?
  
  
• Policy Review—It is a good HR practice to review policies every 2 to 3 years to see if the policy still meets the needs of the business.

The next step, which is one of the most important, is communicating the new vacation policy to employees. Whenever there is a major change and a company is going to adopt a new policy, there has to be a process for communicating it to employees. The communication needs to be done as soon as possible, but at least a month before the policy will take effect is usually the best time frame.

Giving a month’s notice isn’t always possible, but make sure to give employees a good amount of notice so they can get their heads around the new policy, think of how it will affect them on a personal level and then be able to make the proper adjustments in their lives.

Communication of New Policies
Communication is always better if it’s done, not once, but a number of times. And it’s always good to frame the communication from a positive perspective by showing employees how it’s beneficial to them. Here’s what you’ll want to do:

• Make the Initial Communication—This will be the communication letting employees know that the company is adopting a new policy or if the company has changed one of its current policies. Include the date you’re planning on having the policy take effect.
  
  
• Follow-Up Communication—These would serve as reminders of the policy, both what the new policy is and when it is taking effect. Try to follow up the initial communication at least two to three times.

It is rare these days to find a business without established policies. Policies are an integral part of being strategic in today’s world. Operating a business without policies to guide day-to-day activities is like driving around knowing what your destination is and where you’d like to go, but without a map to get you there.

Polices are a way for a business to guide how they operate, not just on a long-term basis, but also on a day-to-day basis.