Developing Company policies from scratch

Its generally rare that you need to develop policies from scratch, but if you do, then this article will give you some ideas for how to approach the challenge and improve your odds of success.

More often, you can simply find similar policies from other companies and repurpose.

If you do go down the path of creating your own policies from scratch, then you need to firstly ensure that you have sufficient time to review, edit and ensure that the policy is rigorous and the majority of issues with the policy are ironed out before being released publicly to the rest of the organisation. as a rule of thumb, unlike most things in a start up, policies which govern how staff interact and behave can’t be iterated over time, the staff look to the business for confidence and certainty and most prefer and environment where the rules are clear, fair and transparent, they generally do not react well to HR teams where policy changes frequently.

It pays dividends to have a peer review committee of staff who can review policies and give feedback before they are release, and during these reviews not only should the policy be reviewed for favourability, but it should also be reviewed for how to ensure its effective, enforceable, not liable for manipulation and doesn’t result in any unintended negative consequences. You should consider a process for this and ensure that any new policy is reviewed with this rigour.

Turning to structuring the policy itself –

Start with good intentions, we have to assume that the majority of staff are there to work and do the right things, you hired them after all, so if they are all a bunch of psychopaths, policies aren’t the problem, you’re hiring evaluation is. We assume all staff are good, and authentic, bad actors are in the minority.

Define the goal of the policy, what is the policy aiming to address and achieve, be clear and concise.

Define the structure, the structure of the policy is generally a general statement supplemented with the various exceptions or use cases, for example with an annual leave policy you’d start with the number of days leave, then dig into the pro-rata, then into the compensation if leave isn’t taken at the end of the year, then how much leave can be rolled over – this stage is the most important to review with the Peer Review group, and is the part that tends to have the most changes and can create uncertainty, so spending time of this is useful.

Define the penalties, a policy is only effective if the rewards/ benefits are significant and the punishments so severe it disincentives bad actors from taking advantage, being clear about the consequences is essential to ensuring policies are taken seriously.

(Optional) Define the process, for certain policies, e.g. annual leave, there are processes than need to be followed, these should also be made clear, and the responsible and accountable parties highlighted, any times should be clearly stated, both the HR and the staff should be held to account, this is how the company can demonstrate transparency, fairness and accountability to the employees. part of the process should always include multiple layers of checking (to prevent fraud and graft) as well as clear documentation. But you have to be mindful, don’t make processes overly complex, the adaptation of a process is inversely proportional to the complexity and number of steps.

Build in mechanics that leverage the team, strong policies aren’t just about process and documentation, as an organisation scales enforcement of policy become more and more challenging, the default in most organisation is to compensate with process, which as i’ve mentioned gets more complex and therefore less effective. So a more efficient way of ensuring policy compliance is to instead, build-in mechanics that reward team compliance, expose and alienate non-compliance and deviant behaviour and eventually ensures that the herd exposes and oust those who aren’t willing to play by the same rules. If you have the right mechanics that rewards the team for policy compliance but also punishes the individual for non-compliance whilst preventing the reward for the team, then the team will naturally keep players inline. Trust the team to hold each other accountable, and trust that bad-actors are in the minority.

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