All businesses benefit from policies, procedures and processes combined into a documented system under which the business operates.
A policy is a written or verbal statement of a firm’s stance on a topic. It defines how things are done in the business and what rules apply. Policies can include such things as annual leave, dress codes, internet usage and the use of drugs and alcohol in the workplace.
A procedure is usually a step-by-step instruction to achieve a certain outcome. Some procedures, such as operating heavy equipment, can be quite detailed. Others can be more general in nature. Specialist procedures, such as handling hazardous chemicals, should be written by someone with experience in the field.
A process is a method or system for achieving a certain outcome. Companies can put in place a manufacturing process or there can be a process for obtaining sales.
It is important that company policies, procedures and processes are properly documented and can be easily obtained by each member of staff. Electronic systems can be useful to ensure that staff members have the information readily available when they need it.
It is also important that when policies, procedures or processes form part of an employee’s conditions of employment that they are either attached to the employment contract or given directly to an employee for consideration.
Benefits of a documented system are:
- better succession options for the business, including saleability
- ensuring that record keeping, compliance and reporting obligations are met
- smooth running of the business
- effective training of new staff
- reduction of administrative time
- assists in reducing risk
- clear direction for employees on how to operate within the business
- consistency in product or service delivered
- the business not totally dependent on the owners.
Policies, procedures and processes should be reviewed and updated regularly – at least annually. Updates should also be made when legislation or compliance changes impact on the business. Any changes to policies, procedures or processes should be communicated to staff.
For more information on the benefits of, and assistance in setting up business systems, contact your local Business Adviser.