The Importance of Policies and Procedures

Policies and Procedures within a company bring structure and add importance to everyday tasks. They are the foundation blocks of building and growth within any organization and must be communicated. Communication is essential. I can’t express how disturbing it is to hear a leader in any sort of organization scoff at the idea of policies and procedures. And it happens far more often than you would expect. Let’s begin by diving in to ‘why’ some leaders may have a negative view of Policies and Procedures.

Aren’t we all Adults?

The most common reason I hear from leaders who are against Policies and Procedures is that ‘we are a team of adults and we don’t need these rigid constraints’. This notoriously misguided response to Policies and Procedures comes from a misunderstanding of their purpose. Like any good partnership or relationship, communication of clear guidelines is essential to building a strong foundation for a long lasting, thriving union. If employees don’t know where they are supposed to go and what guideposts they are supposed to follow, how will they ever be able to accomplish their personal and company set goals? How can they know the direction they should be going?

Let’s take for example the necessity of Employment Contracts and Job Descriptions. Small organizations and Companies should pay close attention here. This isn’t something that you brush under the rug. Employee Contracts, especially for salaried employees, give a clear indicator for where an Employee is starting and what is expected from them and what they can expect from the company. It should include Compensation, Bonus Structure, Benefits, Paid Time Off, Sick Days and Personal Days. It should outline Employment Status, Life of the Contract, Non-Competes and Termination of the Contract by Employee or Employer. A Severance Package should be included along with how Annual Reviews will be conducted based on an attached Job Description.

These things may seem monotonous, but in reality, your Employees will be happier knowing that the hard work they are putting in for you and your company isn’t for naught. They have a bone in this fight and they don’t have to fear what is unknown. (That fear paralyzes and restricts your workers.)

Why Annual Reviews?

Reviews are your ‘Check Ups’ for health and growth of each employee. They are essential in cataloging where an employee is and where they need to be. They are good for the employer because they offer one-on-one moments to guide and direct an employee on what they are doing well and where they can get better. But they also serve as an opportunity for the employee to voice their own needs and desires for growth. It is a set time for them to come and be open about where they are looking to be.

These reviews will shape your company for the better. After instituting these annual reviews, I would regularly have employees asking if we could do mid-year reviews and I could see them getting excited about upcoming annual reviews. They also offer a time to share with them where they are in relation to the whole. Are they one of the best employees? One of the worst? Just a mid-level employee? What can they do to step up?

Why Severance and Exit Strategies?

I would argue that just as important as the Salary and Job Descriptions, the Exit Strategy and Severance are some of the most important pieces to an Employment Contract. In the same way that the beginning of the book is just as important as the ending. The setup of the exit of an employee is just as essential as the on-boarding process. We don’t want our employees to leave, but in life, people come and go. Whether they leave to go to a different field, industry or even retire, everyone will eventually need to exit. So, have a strategy in place to eliminate that unknown so that your employees can work comfortably.

It also gives the company a path for letting employees go without there being any sort of animosity or resentment. Not every exit is or will be a bad one. But Exit Strategies help, even the bad ones, remain tame and professional.

*CAUTION about Policies and Procedures*

You can not have Policies and Procedures in place and not adhere to them. As an owner or administrator, these are checks and balances for you just as much as they are for your employees. If you put a bonus structure in a Job Description or Standard Operating Procedures Manual, you are bound to it. You don’t have enough money in the bank? That isn’t your sales person’s fault. That is the fault of the Administration and C-Suite Team. You will DESTROY your community and employee culture by betraying them. Yes, it is a betrayal not to keep your word.

If you say you are going to give your employees Time Off, Breaks, Paid Lunches or any other Benefits, and don’t. You will have betrayed that trust, and also could be held liable for it. That’s right. Policies and Procedures, according to the Keches Law Group, says in most cases it can’t be used against a company in a lawsuit, but why chance it. Be a Company of your word and adhere to the manual in place.


The importance of Policies and Procedures is in building the community and workforce in the best way possible. It shows that you are looking out for them and they are looking out for you. As you strive towards a Brighter Tomorrow!


You can find more information by visiting our  CEC Website & Online Catalog.  

Find more amazing products on our Catalog or in our Case Studies!