People refer to policies and procedures with a variety of expressions including business process documentation, standard operating procedures (SOPs), department operating procedures (DOPs), work instructions, specifications, and so on. For our purpose here, policies and procedures mean a set of documents that describe an organization's policies (rules) for operation and the procedures (containing tasks performed by individuals) to fulfill the policies.
When an organization documents policies and procedures properly, they can be the strategic link between an organization's vision and its daily operations. Policies and procedures are often necessary because of some external requirement, such as environmental compliance or other governmental regulations. One example of an external requirement would be the American Sarbanes-Oxley Act, requiring full openness in accounting practices.
Here are a few other examples of business issues that necessitate writing policies and procedures:
Operational needs -- policies and procedures ensure fundamental processes are performed in a consistent way that meets the organization's needs.
Risk management -- policies and procedures are identified by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as a control activity needed to manage risk.
Continuous improvement -- Procedures can improve processes by building important internal communication practices.
Compliance -- Well-defined and documented processes (i.e. procedures, training materials) along with records that demonstrate process capability can demonstrate an effective internal control system compliant with regulations and standards.
In addition to helping with the above business issues, policies and procedures can support the basic needs of employees and management. Well documented and easy to access policies and procedures:
allow employees to understand their roles and responsibilities within predefined limits and to stay on the accepted path indentified by the organization's management
provide clarity to the reader when dealing with accountability issues or activities that are of critical importance
allow management to guide operations without constant intervention
allow managers to control events in advance and prevent employees from making costly mistakes
Can you think of another way organizations can meet the above needs of management and their employees in place of documented Policies and Procedures?
Probably not, but we would love your feedback on this question.
And that my friends, is why documented policies and procedures are very necessary.
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Emily ChorbaPrinciple Product Manager Oracle Tutor & BPM
