Business Policy Meaning Nature and Importance
Every company has a specific manner of doing things and operating. Without defined business standards, companies and company leaders frequently have employees make decisions that don’t align with what the leadership genuinely wants to happen. Business policy plans that are clear, simple, and in writing can help any organisation maintain consistency in its operations and free up management from having to micromanage. The way a firm provides goods or services to customers is standardised when business policies are developed and implemented.
Business Policy
Business policy establishes the parameters or domains in which employees of a business may make choices. It enables lower level management to address concerns and problems without constantly engaging high level management.
Business policies are the rules that a company creates to direct its operations. They outline the parameters that choices must adhere to. The acquisition of resources necessary to accomplish organisational objectives is another topic covered by business policy. Business policy is the study of top-level management’s duties and obligations, the key problems influencing organisational performance, and the long-term choices that will have an impact on the firm.
Nature of Business Policy
A business policy must be specific, clear, uniform, appropriate, simple, inclusive and stable.
- Specific: If a policy is not specific, implementation becomes inconsistent and unreliable. For example, “Employees may not park in the guest parking lot.”
- Clear: A business policy has no ambiguity. It is written in easy-to-understand language. For example, “Immediate release of employment is the result of company drivers having two points on their driving record.”
- Uniform: The policy should be a standard that everyone can follow from the top management to the plant workers. For example, “Anyone entering the construction site must have a protective hat, shoes and glasses on at all times.”
- Appropriate: Business policies should be relevant to organizational goals and needs. For example, “Discrimination and sexual harassment accusations are investigated with disciplinary action applicable based on investigation findings.”
- Simple: Policy must be understood by all that it applies to within the business. For example, “No smoking within 100 feet of welding operations designated by the painted yellow floor lines.”
- Inclusive: A business policy isn’t something relevant to a small group in the business, it must cover the wide scope and include everyone. For example, “Business attire is required at all times in the office or meeting with clients.”
- Stable: This refers to implementation. If an incident arises, the policy should be stable such that there is no indecisiveness about following it. For example, “Cell phones are not permitted in the conference room.”
A business policy can be flexible in changing parameters in the business, the industry or the marketplace. Using these features as a guide to creating any business policy helps business leaders maintain a congruent structure in the company. Being nimble in business and adjusting to an employee, consumer and market feedback is what keeps great companies successful.
Importance of Business Policy
Business rules matter and have an impact on a variety of factors, including employee happiness, legal responsibilities, and a company’s public image. Policies ensure that everyone is in agreement with what is expected of them. A firm may have policies that apply to many facets of the business. There might be anti-discrimination, safety, and human resources hiring rules. The dress code, lunchtimes, vacation days, and holidays of workers may also be covered by policies. Greeting customers, managing phone calls, and details of product delivery are among the other regulations that are pertinent to the customer experience.
These laws together foster a productive workplace. Workers who feel protected from harm or harassment at work are happier and more effective. Every company owner has to take into account this crucial factor of productivity. Employees are protected against bias when they are given clear instructions on dress code, scheduling, and time off requests. It establishes the framework for collaboration and the tone of the working environment. Working as a team, or at the very least taking into account other team members, is required even for scheduling.
For consistent operations and the ability to fix possible issues, policies on operations and the customer experience are crucial. Managers may focus on that part of the process to produce better returns if the policy is to follow up after a product is delivered, but that doesn’t happen.
- Establishing a Corporate Culture
Expectations are established when policies are spelled out in a written plan. As a result, a corporate culture of what to do, what not to do, and how to behave is beginning to emerge. Employees in organisations with clearly established rules are better equipped to accomplish their jobs and tend to deviate from the “script” less often than employees in organisations without such regulations.
Of course, policies are useless if management does not carry them out. Some regulations—like those pertaining to safety and discrimination—have legal repercussions and have a direct impact on output and consumer satisfaction. If a management doesn’t insist that staff members follow the rule requiring a six-month evaluation after acquisition, the firm may suffer and it will be more difficult for the manager to implement the rule.
For instance, Google has a corporate culture that is very employee-driven, allowing parents to adjust schedules around child care hours, allowing dog owners to bring Fido to work, and allowing employees to spend some of their time working on personal projects instead of just the tasks that were assigned to them. The organisation has laid out a lot of flexibility with very specific guidelines so that staff are aware of the limits. Because of this approach, Google has developed into a desirable place to work and a technological leader on a worldwide scale.
- Employee Business Policy Training
Business leaders must train employees on business policy. Every employee should receive an employee handbook outlining all policies in one central document. Updates should be disseminated in writing as amendments to the handbook. Should the handbook become outdated, it should be revised so the newly implemented changes are integrated into the employee handbook.
Employers should also keep the handbook accessible via the cloud or online portals so employees are able to access it if there is a question. Additionally, by having it online, there is no excuse for any employee to say they didn’t know.
But this isn’t enough. Employers should hold training sessions to review key policies. Many businesses are holding inclusivity training, helping employees better understand what type of language or actions could be perceived as harassment or discrimination. Don’t assume employees know right from wrong. Train them to understand it. This helps keep the business and the employee out of legal trouble.
The same is true when it comes to operations. If you need employees to follow a specific script on the phone, the review it with them and role play. This holds true for personal interactions as well. Don’t just review sales processes. Take the time to review potential customer service issues so that employees are better trained to address potential problems during the day. The more an employee can deal with customer problems, the less is redirected up the chain of command to leadership. That frees up business leaders to focus on growth and development strategies.
When running a business, it’s important to stick to the rules. Even something as simple as “every off-site worker’s shirt will be tucked in” needs to be managed. As we’ve already talked about, you can’t choose when to put a policy into place. This makes the employees confused and angry because they don’t know which boss will show up on any given day.
If a business policy is put in place and managed consistently, then employees who break it need to be held responsible. Management should be able to follow a process or set of rules that is right for the action. This lets you keep track of what’s going on with your employees and figure out if anyone needs to be let go.
For example, if the policy says that all men must wear a tie and all women must wear pantyhose, the employee might get a verbal warning and then a note in their file if they break the rule. If you broke the rules more than once, you could be put on probation or even get suspended. On the other hand, if the policy is that hard hats must be worn at all times on site, then breaking the rule is a safety issue that needs to be dealt with right away, even if it means writing the person up and taking them off the site.
When it comes to legal issues like harassment and discrimination, policies should require that legal experts, law enforcement, and an investigation be used to find the truth. People can be separated and job duties can be changed while an investigation is going on, but firing is rarely a good idea before an investigation is over.
- Importance of Your Business Policy
The policies and methods of implementation you choose as a business leader to adopt will directly affect how your employees perform. Some business leaders don’t want to have everything in a rigid format while others like to implement specific processes at every stage of the company operational process. This is a business owner’s decision.
Keep in mind that some policies and procedures are designed to prevent legal issues while others are designed to build a company image, experience and culture. A business leader should be aware of how policies are affecting his team. If a dress code is becoming a problem for the majority of employees, a new policy such as a casual Friday policy could change the office dynamic in a positive direction. If no cell phone policy exists but employees are spending hours on personal calls, texts and social media then a new policy with training should be implemented and managed to improve productivity. Managers should regularly evaluate company policies and their effectiveness to the business’ success.
- Building Business Policies
Usually, a business owner or his first team of leaders will write an employee handbook and a business plan with a mission and vision as the first step in making policies. The team needs to think about what kinds of standard policies are set by federal and state laws. Some policies that are regulated are those about privacy, rules against discrimination, overtime and holiday pay, and even programmes for health care.
Most businesses will find that these regulated rules are the same, though some companies have chosen to go above and beyond what is required. Then there are the policies for business and culture. These include the image that the company’s leaders want it to have and the culture that they are trying to build inside the company. A business policy could say anything, from how to dress to whether or not you can smoke at work.
Once the main policies are set, business leaders need to keep an eye on how employees and customers react to them. If a policy is hurting the overall productivity of the company, feedback should be asked for and changes should be thought about. This is what every business leader must do to be successful. Businesses are living things that change all the time. Being too set in your ways can hurt your performance and get you bad results. Sometimes, the first step in fixing problems with production is to fix problems with business policies.
