Policy, Process and Procedure – Understanding the key differences

Systems are the foundations of any business.  Even when not written down, they define your organisation and ensure that things are running smoothly.  For best results, however, they should be documented to ensure every employee working for a company has a clear understanding of what is required as they complete tasks to avoid misunderstandings or inefficiencies.

The problem for businesses is they often struggle to define three key elements:

• Policy
• Process
• Procedure

Too often these three items are used interchangeably, but there are key details in each that make them necessary on their own for a complete working system.  There is often too much confusion surrounding policy, process, and procedure.  Here are the real definitions:

1. A policy is a set of overarching guiding principles which outline your organisational plan for dealing with certain issues and ensure consistency and compliance within your organisation. They set direction, guide and influence decision making. Policies guide the day-to-day actions and strategies and set out what it is about and why it’s needed, establishing a framework of management aims and objectives.  A policy can be driven by business philosophy, competition, marketplace pressure, law or regulation or a combination of some or all of these parts. Policies are high level and do not generally delve into the detail of the ‘how to’ execute.

• • Policies should be consistent, clear, concise, and easily accessible.
  • All employees should understand where they can access Company policies and workplace training should occur for some policies, i.e., standards of conduct, harassment, discrimination etc.
  • In some businesses, the procedure for certain processes such as workplace investigations or Covid management may be incorporated into a policy.

2. The process is the high-level view or map of the activity or task that produces a specific outcome. It should clearly set out the expectations on how an activity should be completed but doesn’t necessarily provide the detail as to how it should be done.  A process will follow the Company’s policies or rules and will set out who executes the activity, what should be completed and when it should be performed.

• • Processes are often in the form of a process flow chart or project plan.

3. The procedure is the focused step-by-step description or instruction of what actions should be taken in specific circumstances or how the process should be completed. Procedures have a beginning and an end and should be followed to achieve the desired outcome. This sequence of steps provides uniformity and is vitally important when training new employees, compliance, process improvement and auditing. As the final step in the policy, process, and procedure implementation employees are often asked to provide input into the creation of the procedure as they are generally the highest users.

• • Process and procedure can often be incorporated together.
  • Procedures continuously change and improve.
  • Procedures should be clearly documented to ensure procedural control and performance outcomes.

All three of these items need to be present for a system to work. It is difficult for anyone to complete a task without having each item.  Creating effective policies, processes and procedures eliminates errors.

When it comes to creating your policies, processes, and procedures, it is important to understand what each relates to and what the goal of each is.  For instance, your company policy on meetings should not include a specific script to follow.  It’s also important to understand how often each should be reviewed and updated to comply with industry and government changes.

In order to thrive, an organisation really needs all three.  Policies look at the big picture, processes set out the road map and procedures detail the individual processes required for success for both the organisation and the employees.

It’s vital that your employees understand the policies, processes, and procedures of your company and when to implement them.

Do you need further help writing, reviewing or sourcing industry compliant policies for your business? Contact us today

At Red Wagon, we believe in the importance of setting strong foundations for your business, and through our Red Wagon Managed HR solution provide access to an extensive suite of policies, templates, and guides via an on-demand, easy access document portal in the straight-forward manner you expect from the Red Wagon team.