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Organizational Policies

An organizational policy is set of rules, responsibilities, processes and timelines that govern the behavior of various entities connected with an organization like the employees, management, partners, suppliers, etc.

There are lots of policies needed to run a company. Here are some examples of policies within an organization:

  • Payroll policy
  • Attendance policy
  • A paid-time off (leave) policy
  • Sales incentives policy
  • Travel policy
  • IT policy

The Need for Policies

When we talk of a policy, we mean a written policy. Otherwise, policies are always in operation but in a loose and inconsistent manner.

A simple test of a professional organization is the existence of written down policies.

Written policies are needed for many reasons:

  • To clearly communicate a set of governing rules, timelines and processes.
  • Clarify responsibilities of the employer
  • Clarify responsibilities of the employee
  • To comply with government regulations (statutory compliance)
  • To establish a standard and consistent practice
  • As part of the ISO standards requirement
  • To drive business strategy
  • To ensure good corporate governance
  • To establish best practices

Benefits of Written Policies

When policies are written down, they lead to clarity and transparency. It signals professionalism and forces everyone to commit to the policy.

There are many activities that a policy administrator needs to do.

  1. Design and publish policies
  2. Revise the policies from time to time
  3. Create awareness
  4. Ensure policies are acknowledged and accepted
  5. Execute the policy in a consistent manner
  6. Enforce discipline and adherence to policy
  7. Acknowledgment and acceptance

Anatomy of an Organizational Policy

The following key elements need to be present in any given policy.

  1. Objective: what is the purpose of this policy?
  2. Applicability: who is this policy for?
  3. Eligibility: if this is a benefit, who is eligible to avail the benefit?
  4. Effective Date: when is this policy effective from?
  5. Rules and regulations: what are the various governing clauses of this policy?
  6. Processes: what are the various processes related to this policy?
  7. Timelines: when do various activities related to this policy take place?
  8. Consequences: what happens if the policy is not followed? How will it be enforced?

How to Design a Company Policy

At a high level, designing a policy has 5 major stages:

  1. Research
  2. Create draft policy
  3. Review by various stakeholders
  4. Approval from decision makers
  5. Publish to stakeholders

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