The Importance of Business Policy: How to Make Your Company Thrive

Leadership in a small business, or any business, without clear internal policies often has subordinates making decisions that don’t support the company’s mission and vision. Understanding the importance of workplace policies and procedures is the essence of success. This article will help you understand the importance of business policy.

A company policy sets the culture, whether you have employees or work independently. Regardless of size, creating workplace policies and procedures is one task you must complete.

I get it; being a business owner is chaotic. You are always on the go, and creating policies and procedures might not be a priority, or simply dismiss it as not having the time to implement it.

But having them can save you headaches and heartache.

What Is a Business Policy?

A business policy is a document that provides guidance on how a company or organization should operate. It can cover everything from finances and accounting to marketing and human resources.

Having a well-defined business policy helps to ensure that everyone in the company is on the same page and working towards the same goals. It can also help to prevent disagreements and conflict between employees.

Some policies are established by the Federal Government, while the administrators conceive others to develop uniformity of tasks. As an example, discrimination is a policy founded by the Federal Government.

On the flip side, the dress code is a policy publicized by the administration.

The business policy must be:

• Specific. It contains specific details and how to implement them. Otherwise, it is impractical to execute.
• Clear. Easy-to-understand language and with no ambiguity.
• Uniform. It should be standard, and everyone, including management, must follow it.
• Appropriate. It must be relevant to the organization.
• Simple. It needs to be understood by everyone within the workplace
• Inclusive. While some procedures may target certain positions within the company, they must also cover the entire entity. For instance, the dress code for a field worker might be a different requirement for a salesman. Keep in mind that general guidelines are for everyone.
• Stable. There should be no indecisiveness about following it.

Importance of Business Policy

Mostly, small businesses do not focus on company policy because operations are directly under the owner’s supervision. When running a small outfit, the CEO can quickly provide guidance.

The goal of company policy is to define everyone’s roles and responsibilities. Additionally, a well-written business policy outlines which decisions each employee can take and which need approval from a manager. It will decrease misunderstands while creating a better process.

How to Create Workplace Policies and Procedures

Glenn Harts, a South Carolina native, owns and operates Harts Janitorial Services. And just like many other small businesses, he started as a solo owner-operator.

Harts is relatively new to being a business owner. In a previous professional life, he was a business analyst for a mid-sized corporation. Before pulling the plug at his day job, he spent much time researching.

Within two years, Harts Janitorial Services has hired seven people. Like most small businesses, as an owner, Harts spends most of his time focusing on administrative work and growth.

However, with new employees coming into the fold, he spends more and more time fixing issues. Due to the inexperience as an owner, it never crossed Glenn’s mind the amount of human resources work that comes with each new hire.

Moreover, he spends much time on the phone dealing with customers’ complaints. The company has done well in sales, and business has grown exponentially. But it is also encountering its share of problems.

These issues are primarily due to the lack of policies and procedures. When business policies are conceived and observed, they set a standard across the board on how the services are delivered. Through this experience, Harts realized the importance of business policy. The first step was to standardize the services by creating a field manual.

Field Manual

A field manual contains all the details on how tasks are executed. For instance, Harts broke down every job and documented how he wanted it to be done, including:

• How to mix the chemicals. How many parts of each and the amount of water
• The type of mop used depending on the flooring
• Where to place the caution signs
• What compounds to use when cleaning toilets, mirrors, sinks, stainless steel, etc.
• The order in which to clean items.

Furthermore, he added how to perform each task. For example, the worker must clean from top to bottom when cleaning an office area. It starts from the ceiling fan, followed by the computer monitors, dust the desk, vacuum, etc.

Additionally, he also implemented a checklist for each client. At the end of the shift, workers were to return the list as a form of job completion.

Importance of Business Policy – Employee Handbook

Policies and procedures are tailored made for each company. The book should contain rules and practices and reflect the culture you are attempting to establish.

Keep in mind that creating workplace policies and procedures is the best way to absorb your organization growing pain.

Company values and mission statement

First and foremost, an employee representing your company has to align with its values, missions, and goals. Opening your handbook with the above principle sets the tone for the remaining policies.

If you have not created a mission statement, you should do it as soon as possible. It has to be concise about what matters the most for your company.

General Employment information

Regarding employment, you must consider that the federal and local governments dictate most regulations. However, administrators decide on other topics. If I had this in place before I hired employees, my life would have been much different.

• Hiring policies.
• Payment schedule and the methods
• Full-time vs. part-time
• Attendance and tardiness
• Overtime pay
• Remote work (if applicable)
• Meals and breaks
• Leaves and sick time
• Performance review procedures
• Driving between clients
• Safety and security procedures
• Resignation and termination procedures

Be sure to be as detailed as possible in each of these cases. Also, consult with a local expert to ensure your policies comply with federal, state, and local regulations.

Social Media Policy

Social media plays a substantial role in our daily lives. About half of the world connects to some kind of social media daily. Your code should aim to protect your company and empower your employees to share a positive message. Develop clear guidelines of what is permitted sharing and what is confidential information.

Standard of Conduct

Aside from law requirements, your company has its expectations on employee conduct. You will have to develop on-the-job guidelines. Be sure to include the following:

• Dress code
• Drug and alcohol usage policy
• Ethics policies
• Personal technology use
• Social media policy
• Data and customer privacy
• Rules on accepting gifts from clients
• Conflict resolution

Employee Benefits

In this section, you will also have to consider government regulations. But it would help if you covered what your company offers its employees.

• Insurance coverage you offer. Due to how extensive this subject is, you should only cover the basics and what you offer.
• Vacation and paid time off
• Retirement plans and who’s eligible
• Training benefits and tuition reimbursement
• Any soft benefits, such as a flexible schedule, free lunches, etc.

Employees tend to refer to this section very often. Take advantage to promote on-the-job perks to increase loyalty.

Violence in the workplace

Many state laws require a company to protect its employees from violence in the workplace. Be specific in your handbook when defining restricted actions and your stand on weapons.

Confidentiality policy

A confidentiality section will protect your clients, trade secrets, and service procedures. Confidentiality covers many subjects, including personal and proprietary data, software, prototypes, internal and external communications, etc. It is highly suggested that your employees sign a non-disclosure or non-compete agreement.

Disaster or severe weather policy

Depending on the state your company is operating, this section will come in handy. For instance, severe weather in South Carolina is not considered the same as in New York. You should cover the company’s expectations in the event of an emergency. Additionally, specify communication instructions and procedures if the main office is closed.

Importance of Business Policy in Conclusion

Regardless of the size of your business, it is crucial to maintain workplace policies and procedures. It will assist you in keeping an organized company. A well-written company policy helps ensure compliance and limits liability risks.

While small business owners tend to look away from company policy, creating a workplace policy and procedures is essential to your business.

It informs the roles and responsibilities of each employee. Additionally, laying out standards of services ensures you are providing consistent services to your customers.

Ideally, you should create a company policy before you start your business. The document can be edited and added to it as you grow. Additionally, monitoring to ensure employees follow policies and procedures is crucial.

Updated: August/2022