Company Policy: Everything You Need to Know
A company policy helps foster employee wellness, fair treatment, and to ensure that a company is following laws and regulations.8 min read
Updated August 13, 2020:
What Is a Company Policy?
A company policy is a guideline to help employers dealing with employee accountability, health, safety, and interactions with customers. Policies are also guidelines for legal issues, regulatory requirements, and any situation that could lead to serious consequences. A company policy helps foster employee wellness, fair treatment, and to ensure that a company is following laws and regulations.
Types of Company Policies
Created to protect worker rights, policies, and procedures also protect the business interests of the company. Policies also help to drive customer service by providing a mission and vision concerning the company's short-term and long-term plans. Policies also provide a specific business model for the organization.
How management leads a company is crucial to employee motivation, addressing concerns, and planning the organization's goals. Since people make up businesses, it's crucial for employees to know what their leaders believe in and stand for, as well as, what it means to be a part of the company.
Policies regarding employee conduct layout the specific responsibilities and tasks that all workers must follow and do as part of their job. These rules establish guidelines for employee behavior including:
- Dress code
- Safety procedures
- Harassment policies
- Technology use
- Appropriate behavior
Employee Position Descriptions
Job descriptions clarify the role of every worker including their responsibilities, amount of authority, overall goals, and specific duties. Position descriptions create a clear-cut system for employee training and employee performance assessment.
Personnel Policies / Compensation and Benefits Policies
Personnel guidelines clarify things like:
- Business hours
- Employment terms
- Wages and salary
- Insurance and benefits
- Sick days
At hiring, employees get a manual or handbook that should cover the personnel policies listed.
This is a chart with every employee's name and job title that illustrates every employee's place in the organization's structure.
Equal Opportunity/ Non-Discrimination/Harassment/Retaliation
These rules ensure that employees are treated fairly at work. Most businesses have equal opportunity policies, including discrimination and affirmative action rules, that encourage fair treatment for all employees.
Every organization should offer equal opportunity employment to keep employees from facing inappropriate behavior from other workers, management, and contractors regarding the following:
- Sexual orientation
- Cultural beliefs
- Religious beliefs
Every company should have guidelines in place concerning disabled or pregnant applicants or employees. Diversity guidelines should be in place. All organizations need a "no retaliation" policy to protect workers that report instances of harassment or discrimination.
Work Hours, Attendance, Time Off and Turnaround Time
Attendance policies are guidelines and rules concerning:
- Employee schedules
- Adherence to the schedule
- Scheduled time off
- Absences or tardiness
- Consequences for missing work or being late
For example, many businesses have a set amount of days an employee can miss in a specific amount of time. The policy clarifies what actions the employer can take if a worker misses too much.
Attendance policies define attendance expectations and consequences at hiring to avoid problems down the road.
Likewise, employees will want scheduled days off and need to know how far ahead to request time off and what the turnaround time is for managers to process these requests. It should be clearly written that when a request comes in late, a disciplinary strike may be incurred.
Policies on substance abuse forbid workers from using alcohol, drugs, or tobacco products during work hours, on business property, or at work functions. Many companies have specific guidelines for cigarette use if employees can smoke on the property at all. Substance abuse guidelines should clarify the steps an employer can take if drug or alcohol use is suspected.
Workplace Safety Policies
Because health and safety risks exist in all environments, workplace safety rules help to mitigate damages caused by worker negligence. Companies create rules specifying workplace safety based on:
- Best industry practices
- City and county laws
- State laws
- Federal laws
To ensure worker safety, a business's policies should clarify the following:
- What safe behavior is
- Proper safety equipment uses
- Reporting safety issues
All safety policies should follow local, state, and federal requirements, as well as, Occupational Safety and Health Administration (OSHA) guidelines. It is a company's responsibility to maintain a safe work environment for employees at all times, so neither the workers nor the company gets hurt.
Discipline policies clarity what constitutes a violation of company rules in instances of:
- Poor performance
- Unsafe behavior
These guidelines also lay out how a worker is disciplined if rules are broken.
Employee termination happens in every organization. The process usually goes much smoother if an employee knows the steps leading up to termination. Regular performance assessments and written documentation of disciplinary action show a clear history concerning an employee's poor behavior or job performance.
Technology Policies: Device Use / Internet & Email
It's possible a company could face the consequences of an employee's actions on the computer systems. Device use and technology policies provide written guidelines concerning what an acceptable and unacceptable use of company technology is. Device use policies protect companies from liability if a worker performs illegal actions on company technology. Technology guidelines clarify what workers can and cannot do using the company's internet or email services. It also outlines what's acceptable regarding personal email and social media use at work.
Purchasing policies protect the business when spending happens by outlining the standard for how employees handle company money. These rules govern things like:
- Spending authorization
- Who can sign checks
- How the company bids jobs
Compensation and Benefits Policies
These rules clarify what employees receive or can earn if they adhere to the company's policies.
Credit/Late Payment Policies
Anytime someone hires the company, a payment process should be written out detailing how the client receives a bill and the forms of payment accepted. These policies should clarify:
- The time allowed for payment
- The grace period allowed
- Consequences of late payment
Credit policies clarity and determine payment and credit terms, how a client starts an account, and how to build good credit with the company. These policies also clarify the company's collection criteria.
Internet or brick-and-mortar retailers must have a return policy that clearly states the rules. Companies with stricter return policies must determine whether the policy is firm, or the rules are bendable depending on the customer's behavior. For example, will a return be granted if a customer keeps complaining to managers higher up the ladder?
In the service industry, refunds are possible, even though a product wasn't sold. Many companies have customer satisfaction or money back policies to bring customers in.
Privacy & Confidentiality
Privacy policies are put in place to provide customers, employees, and the business with protection, but also to build trust through transparency. Confidentiality policies keep sensitive information protected to maintain a good working relationship with customers, suppliers, and vendors.
Customer Quality Policy
Customers are the most critical part of any business because no business would exist without its customers. Quality policies outline what's important to the customers and how to maintain those standards.
Ethics & Conduct Policy
Customers want fair treatment and ethical business practices without any concerns about privacy and security. Ethics and conduct policies define exactly what ethical behavior looks like at all times during customer interactions.
Steps to Create and Implement a Policy
Identifying the Need for a Policy
Policies are necessary to provide a workplace that's:
Rules are created for the majority of employees, not for a few. Policies cannot be written for every expectation and every failure to meet those expectations. Policies are written for every contingency take away management discretion when dealing with personal employee needs. Policies should create a fair and impartial environment where employees feel at home.
Guidelines to See If a Policy Is Needed
Policies should be in place to clarify behavioral expectations regarding:
- Cellphone use
- Internet use
- Dress code
- Email use
- Social media
Policies should be in place to establish standards concerning:
- Travel expenses
- Personal purchases of company product
Policies should be in place to shield the company legally in instances of:
- Harassment charges
- Non-discriminatory hiring and promotion
- Compliance with laws including minimum wage, EEOC
- Compliance with government policies including FMLA and ADA
Policies are needed to define workplace guidelines concerning:
- Disciplinary steps
- Safety rules
- Worker breaks and lunches
Policies are needed to keep the workplace fair and consistent regarding:
- Paid time off including vacation, sick days, and bereavement
- Jury duty
- Tuition assistance
Articulate the Goal of the Policy
Once it's decided a policy is needed, the company must decide what the desired outcome of this policy is. Employees should be informed as to why the policy was created, what the company's position is, and that there could be instances that aren't covered by the policy.
The goal of any policy should be easy to understand, but sometimes not all policies are 100 percent clear. For example, a company's goal regarding things like FMLA, discrimination or harassment, or progressive discipline isn't always addressed by a specific company's policy. It's up to the business to decide what the outcome of every policy should be.
It's best to research other companies' similar policies as a basis for a new policy rather than drafting one from scratch. Online services like the Personnel Policy Manual Service or the Society for Human Resources Management offer sample policies for subscribing members.
Employment law lawyers often draft generic policies for clients that they customize for each business. When new regulations pass or the Department of Labor hands down new rules, employment attorneys draft a policy to meet the guidelines.
Develop and Write the Policy
Policies must be understood by the workers that are reading them, holding others accountable to them, and living by them. Keep the words simple and concepts easy to understand. All policies should address the basics and the most frequently occurring exceptions through "what if" questions. No guidelines will ever allow for every contingency.
Review the Policy
Have a diverse group of workers read the policy and raise concerns they have about the policy. This allows employers to see whether the policy is understood and able to be followed. After feedback, make changes as necessary to address concerns.
Obtain Management Support for the Policy
Have the managers who will enforce the new policy read it and make sure they support the change. It's critical that management supports a policy change.
Obtain Legal Review of the Policy
If a policy could lead to any legal issues for the company or employees, it should be gone over by a lawyer before it's ever sent out. Companies should make it clear they don't want the policy rewritten in dense legal jargon, but only reviewed for possible legal implications and appropriate language.
Implement the Policy
Deliver and cover new rules in smaller groups, with each worker, or in a staff meeting depending on what the policy changes and covers. Controversial policies may need to be distributed to management first, so they can help employees understand it.
Deliver written copies of the policy with an attached sheet where workers can sign that they've read and understood the policy. Two sheets allow employees to have a copy.
Decide How You Will Communicate the Policy in the Future
Add new policies into the handbook or into the new hire orientation. File a digital copy in the business's intranet or on the network's public drive. Any system replaced by the new one must be stored for future reference.
Interpret and Integrate the Policy
It doesn't matter what's written exactly in a policy since its application and practice will decide the actual meaning of the new policy. Business owners and managers must stay consistent and fair as the new rules are deciphered in time. If practices fail to adhere to written policy, it should be rewritten.
Clear company policies challenge workers to higher standards. No amount of rules will ever eliminate problems a company will face, but they establish a level of protection when companies hire new employees and interact with customers.
For help writing or revising a company policy, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.