Does your business have a policy and procedures manual that covers company rules and employee guidelines? If not, it is time to develop one. It is a straightforward process, and once you have a workable template in place, you will be able to make revisions and updates as your company changes and grows.

An effective policy and procedure manual is an essential management tool. As a piece of required reading for all employees, it states business goals and policies and communicates appropriate standards of action and behavior for all employees.

Your manual should include your company best practices, your core business process descriptions, and the specific methods and standards for how work is performed. This manual enables you to simplify employee training, and to focus your company for growth.

The manual can be printed and placed in a three-ring binder, placed in a folder on a network share drive, or automated and published online using procedures management software. Or, it can be available in each of these formats. What is important is that everyone in your company knows about the manual, reads and understands the manual, and knows where to find it when they need it.

Essentially, your policy and procedure manual is really about good communication. Your manual communicates your standards.

Your employees need to know what you expect of them. Your supervisors need a manual to reference for managing day-to-day business processes. By documenting your standards, you communicate what is important for your company's quality, growth, and customer satisfaction.

With a policy and procedure manual in place, your staff will have somewhere to go when the unexpected happens or, in other words, when they wonder, "What do I do now?" or, "How do I handle this?" Let's take a look at the benefits of having written policies and procedures.

First, the manual helps your company avoid inconsistencies. With a written guidebook to refer to, your team will have clear directions from management on how to handle specific works situations. Clearly defined policies and procedures express the company's desire to make consistent and impartial decisions.

Let's say a new employee is chronically late for work, for example.

When you have an existing policy on tardiness, your manager will not have to make judgment calls on the spot. He or she can refer the employee to the manual. A written policy avoids the uncomfortable situation in which one manager excuses a chronically late employee while another manager fires a chronically late employee. In other words, the manual spells out the consequences for work behavior and takes out any opportunity for ambiguity, which can cause hurt feelings.

When company policies and procedures are in writing, you let employees know exactly what they need to do to remain employed with your company. When employees are required to read the manual, sign a statement that they agree to abide by it, they can be held accountable for their actions.

Another benefit of an effective policy and procedure manual is that it can protect your company from possible legal action or employee fraud. When you pay careful attention to the content of your policy and procedures manual, it can help you defend disciplinary actions and other actions in a variety of business situations.

It is important to have your attorney review your manual to determine if there are any legal issues that need your attention, and if you are following federal and state legal requirements as an employer.

Thirdly, a policy and procedures manual can serve as a training tool, since it tells employees how they fit into the overall structure of the company, and it tells them where to go if they have questions or concerns. New workers will use the manual to help them get up and running in a timely manner.

An effective manual describes critical daily tasks that must be accomplished for your business to run safely and efficiently. More than just a list, the manual also should provide details on why things are done the way they are done.

Now, you may be wondering what the differences between policies and procedures are. The two terms are often used interchangeably, but there are key differences between the two. A policy states what management wants employees to do, and a procedure describes how that task should be done.

Since, an effective manual contains both policies and procedures, let's look more closely at each of them.

A policy is a guiding principle that sets the direction for an organization. Policies, then, are the rules and guidelines under which a company, division, or department operates. In your manual, you will have policies for the overall company, for specific parts of the company, and for individual employees.

Here is an example of a company policy for bill paying:

Accounts Receivable personnel shall ensure that all outstanding customer invoices are paid within 30 days (net 30) and 20 days next quarter (net 20).

And here is an example of an employee policy:

Smoking and drinking are strictly prohibited within the company offices.

Here is an example of an inventory employee policy:

Warehouse personnel must count physical inventory on a weekly basis to ensure the accuracy of the general ledger balance.

Company policies set a standard for your company image. They create a level of uniformity in employee rights and responsibilities. Without them, your employees will have varying personal standards.

Therefore, it is important to consider carefully what kind of image you wish to project, as a company, when you are developing your new manual. Policies typically reflect that desired image or brand.

Uniformity

Policies create a level of uniformity in employee rights and responsibilities. Without clear direction, employees usually have varying personal standards. A company dress code is an example of a policy.

Without a dress code, some of your employees might wear a suit to work, while others might wear jeans and t-shirts. If you would like your employees to convey a consistent image to your customers or clients, a dress code takes the guesswork out of the situation.

Best Practices

A best practice is a technique or method that has shown consistently positive results in your company. These policies direct employees to act in line with what benefits a specific department and/or the entire organization. Many sales organizations have best practices policies for communication with clients and customers, for example.

Safety

Many organizations have policies that address employee and customer safety, as well as legal and ethical safety for the company. These policies are particularly important in warehouses, factories, or even restaurants, where dangerous equipment is used, or in any area of a business where injury is a concern.

It is possible to go overboard with policies. Excessive rules and regulations can have a negative effect on morale. Be sure that your policies do not restrict creative thinking, or that they do not go against your established or desired corporate culture.

Procedures, on the other hand, are the means for putting policies into action. Procedures offer specific instructions necessary to perform a task.

Procedures describe who does the task, what steps must be performed, when those steps should be performed, as well as how the procedure should be performed. Procedures also tell the important "why" something is done at your company. These "whys" are important ways of distinguishing your brand and of reflecting your particular mission.

Procedures can be written as a series of steps that must be accomplished to achieve a desired result.

Here is an example of an accounts receivable procedure:

In order to get timely results, accounts receivable employees will follow the following procedure:

In many cases, a procedure can be written as a checklist. Forms may be part of your company's procedures, as well. For example, your company may require that every employee who is terminated complete a form as part of an exit interview. Your manual could include this form, as well as a checklist on how the exit interview is to be conducted.

Keep in mind that the goal of both policies and procedures is to streamline your business and to maximize consistency.

An effective policy and procedure manual:

• is written with the specific goals of the company in mind.

• is written using simple, clear, concise language.

• offers basic knowledge of the company, as well as specific details.

• uses a clear format that is reader-friendly.

• considers why the reader will need this information.

• provides consequences if policies and procedures are not followed

• gives accurate contact information for readers who have questions or need more information.

• is reviewed regularly and updated as needed.

By this time you may be worried that putting together a comprehensive policy and procedure manual will take a good deal of time. However, in reality, a carefully drafted manual can save your company countless hours of management time in the long run.

You will discover that having a framework for your management rules and for the guidelines of your organization will help your organization become more effective at what you do. Your manual should be an outgrowth of your company's mission statement.

Do you have a clear mission statement? A mission statement should be a clear sentence (or two) about the values, beliefs, and philosophy of your organization. This statement should be concise enough that everyone in the organization can understand it and realize how the part they play fits into that mission.

Here are a few effective mission statements:

"Google's mission is to organize the world's information and make it universally accessible and useful."

"The mission statement of Zappos.com, also referred to by Zappos employees as their "WOW Philosophy," is: "To provide the best customer service possible."

"To be Earth's most customer-centric company where people can find and discover anything they want to buy online." (Amazon)

"The mission of The Walt Disney Company is to be one of the world's leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative, and profitable entertainment experiences and related products in the world."

Notice how, in just a few words, these mission statements provide purpose and reveal the organization's corporate culture. Now, using this mission statement as a starting point, your organization can develop goals and objectives. These may include categories such as product quality, customer service, low employee turnover, customer retention, financial performance, leading sales figures, new product development, etc.

What do you think of when you think of a manual? If you are like many of us, you think of a dull, dreary document that will put you to sleep before you are done reading it. Perhaps you have even signed such a document that you have not even fully read.

Yes, most of us think of policy and procedure manuals in a negative light. However, your company can change all that. It's time to turn your thinking around and to see the positive side of policy and procedure manuals.

Unlike what you may have thought, a policy and procedure manual is not designed to control employees, but actually to empower them. Have you ever considered the fact that within set boundaries, you can have more freedom.

An effective policy and procedure manual enables your staff to do what they do best for your company. Once they understand the rules they must abide by, they are free to think, do, and create within those parameters. They don't have to be constantly checking over their shoulder or, worse yet, asking if what they are doing is okay.

Your manual also empowers your management staff to perform consistent and fair oversight, without having to make decisions on a case-by-case basis.

Of course, in order for these benefits to occur, your manual must set the right tone. It must make sense and be easy to read and to follow.

Are you ready to get started on your new policy and procedure manual? Do you wonder where to begin?