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5 Reasons Why Policies & Procedures are Important for your Business

No matter the industry, every organisation needs policies and procedures to operate effectively and successfully. Together, they guide your organisation and reduce the risk of liability. In addition, they promote consistency across the organisation for both employees and customers. This consistency builds a healthy reputation for your organisation, especially regarding employee touchpoints with customers.

Successful organisations don’t see their HR policies as just a compliance requirement. Instead, they recognise that these vital components set guidelines and parameters for how their business operates. Without adequate and well-developed policies and procedures, there are no rules. And unfortunately, without defined rules, people create their own.

So clearly, policies & procedures are essential to successfully running a business. But before delving deeper into why, let’s start by better understanding what they are… What is a Policy vs a Procedure? Policies and procedures go hand in hand but are not interchangeable.

A policy is a predetermined course of action, establishing the guidelines towards business strategies and objectives. It links an organisation’s vision, values and day-to-day operations. Policies identify key activities and guide decision-makers in handling issues as they arise.

A procedure explains a specific action plan for carrying out a policy. In plain terms, a procedure is a road map. They eliminate common misunderstandings by identifying job responsibilities and establishing boundaries for those jobs. Procedures enable managers to control events/issues in advance to prevent the organisation from making costly decisions.

Using policies and procedures gives employees a well-rounded view of the workplace, allowing them to know the culture the organisation is striving for, the acceptable behaviours, and how to achieve them.

Workplace policies have received a poor reputation, sometimes for being long or voluminous. However, in practice, a well-drafted set of workplace policies can play an essential role in protecting the employer’s interests while creating a positive workplace culture. Why policies & procedures are crucial for your business.

A well-drafted set of policies and procedures ensures that your company rules, standards, values, culture, and benefits are clearly outlined. Policies and procedures address common HR issues or questions and also minimise your risk of receiving unfair employment practices claims.

Policies & procedures also: Increase compliance.

Every industry has its own set of laws, regulations, standards and best practices that businesses need to abide by. In addition to those, policies & procedures help your organisation comply with international, federal, state as well as local laws and regulations.

Set by world trade bodies such as WTO (World Trade Organization), GATT (General Agreement on Tariffs and Trade) or the United Nations, these reflect the local regulations in each country.

Ensuring compliance requires organisations, and specifically their HR department, to continually review the current compliance environment. Policies & procedures are part of this environment and have to be updated based on new and changing laws, as well as industry best practices.

Workplace policies & procedures provide employees with the clarity of what is expected of them in all aspects of their employment; whilst also protecting organisations from legal liability when disruptions arise. Improve internal processes.

As companies expand and evolve globally, internal processes can be challenging to follow. However, these are essential in ensuring consistency throughout the business. Whether this is in the level or quality of your customer service or product, your business reputation depends on consistency.

Policies & procedures clarify internal processes, ensuring they are achieved and helping employees provide value & consistency to customers/clients. Help you navigate incidents & crises.

Policies & procedures can prevent workplace incidents with the correct safety measures in place if or when an incident occurs.

They keep organisations from overlooking incidents, preventing them from becoming crises. For example, whilst workplace incidents happen internally and can interrupt day-to-day operations, a crisis usually happens externally and can be harder to anticipate and control.

Examples of crises include disasters, faulty products, malware attacks, and lawsuits. Policies & procedures detailing good customer service, as well as social media and communication plans, can help your organisation reduce the damage in a crisis. Let employees know where they can turn for help.

Policies and procedures are important as they help clarify and reinforce the standards expected of the employee in all their professional dealings. On the other hand, they also help employers manage staff effectively by defining what is acceptable and unacceptable in the workplace. Furthermore, policies & procedures will set out the processes and options available to address workplace grievances.

Hence, it is essential organisations take the necessary measures to explain their policies & procedures to their employees properly. Employees should be provided with a copy (either hard form or electronic), and they should sign an acknowledgement of receiving and understanding the policies. Enable consistent processes & structures.

Policies & procedures keep operations from devolving into complete chaos. When employees follow clear policies and procedures, organisations run more smoothly.

Organisations will operate as they’re meant to, and mistakes and hiccups that occur can be quickly identified and addressed.

When staff are following policies & procedures, your organisation can use time and resources more efficiently. As a result, you’ll be able to concentrate on expanding and achieving goals as an organisation.


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