Policies and procedures
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Policies and procedures in business help us to standardize operations, make processes simpler and work tasks more understandable for those who perform them. We are obliged to introduce certain policies and procedures due to legal obligations, such as policies and procedures from labor law, tax legislation, personal data protection, occupational safety, environmental protection or consumer protection. Depending on the size of the company and the industry, the legal framework requires the adoption of different policies and procedures.
However, even small companies that do not have a legal obligation to introduce different policies and procedures can take advantage of numerous advantages by applying them.
Policies and procedures in the organization play a crucial role in building and maintaining its reputation as an employer. Employer branding refers to the perception and reputation of an organization as an employer in the eyes of current employees, potential job candidates and the general public. Organizations with clear and well-defined policies and procedures are more appealing to job seekers. They want to know what their work life will be like in the organization and how clear the processes related to hiring, advancement, and compensation are. Having clear and fair policies and procedures increases employee satisfaction and contributes to a positive work environment. This directly reduces workforce turnover and preserves key talents. Policies and procedures reflect the organization's values and operations and also pertain to inclusivity, respect, ethical business, and social responsibility. If they are well defined and applied consistently, they can significantly contribute to the creation of a positive employer brand, attract high quality candidates and increase employee loyalty and engagement.
✔ Hiring and onboarding
✔ Working conditions
✔ Business processes
✔ Accounting and reporting
✔ Budgeting and cost management
✔ Internal and external communication and reporting
✔ Collaboration with clients and suppliers
✔ Production and quality
✔ Inventory management
✔ Data protection
✔ Workplace safety
✔ Ethics and social responsibility
Introducing policies and procedures into business can bring several advantages to the organization. Creating new policies and procedures does require certain efforts and resources, but in the long run, it can bring numerous benefits and improve the overall company's performance.
These are the key advantages:
✔ Increased Efficiency: Implementing standards can help optimize business processes, leading to increased efficiency and reduced waste of time, resources, and money.
✔ Facilitated Employee Training: Well-defined policies and procedures make it easier to train new employees as they have clear guidelines on how to perform their tasks.
✔ Reduced Risks and Errors: Through well-designed policies and procedures, a company can minimize the risk of mistakes, legal violations, or unethical behavior. This is particularly important as errors in small and medium-sized businesses, which often have limited resources, can have a significant impact on the business.
✔ Assistance in Compliance with Laws and Regulations: Policies and procedures ensure that the company operates in compliance with relevant laws, regulations, and industry standards. This can reduce legal risks and potential penalties.
✔ Clarity and Consistency: Policies and procedures provide clear guidelines on how specific business processes and activities should be conducted. This ensures consistency within the organization, making it easier for employees to understand their tasks, obligations, responsibilities, and rights.
✔ Better Risk Management: Implementing appropriate policies and procedures helps identify and manage various risks faced by the company, including operational, financial, security, and environmental risks.
✔ Enhanced Professionalism and Trust: The introduction of policies and procedures can improve the company's image and create a sense of professionalism among clients, suppliers, and other stakeholders.
✔ Improved Human Resource Management: Policies and procedures facilitate human resource management, including employee evaluation, rewards, penalties, and conflict resolution.
✔ Easier Measurable Performance: With policies and procedures in place, it's possible to set measurable objectives and monitor performance to ensure the achievement of desired results.
Introducing new business procedures and policies can be challenging for both newly established companies and those that have been in business for many years. In both cases, there are advantages and disadvantages associated with the continuity of business and the company's experience.
For a company that has been in business for many years, there are some positive and negative differences compared to newly established companies:
✔ This company has more experience and often more resources to make informed decisions about introducing standards, policies, and procedures into business.
✔ There might be resistance from employees who are used to existing work methods, which differ from the standards.
✔ If the existing processes and policies are outdated or inefficient, it is necessary to analyze and optimize the business, which may lead to restructuring of the company.
For a newly established company, the advantages are:
✔ Creating policies and procedures from the beginning and adapting them to your own business and goals.
✔ Employees have not adopted wrong practices, so there's no resistance when implementing standards.
✔ There is greater flexibility and speed in making decisions and implementing them.
In both cases, it's crucial to conduct a comprehensive analysis before introducing policies and procedures to identify which business practices are positive and which ones need to change.
The planning and communication are the most important aspects of introducing policies and procedures, involving all stakeholders, especially employees. Only then can the optimal combination of new ideas and existing experience be achieved, resulting in the best outcomes.
The decision to introduce procedures and practices should be motivated by long-term goals rather than short-term results.