Policies outline how businesses should manage issues and set expectations for all employees regardless of their position. Businesses of any size or industry need to have policies as they help them in their mission to be successful entities. In some countries, policies are often required to promote compliance. They set standards for what is perceived as acceptable and unacceptable.

Policy vs Procedures

While policies act as a guide for decision making and day to day activities, procedures are most specific and explain step by step actions. Policies outline principles that need to be followed but they do not explain how they need to be enforced. They leave room for flexibility while setting a common standard. On the other hand, procedures provide a lot more detail that do not allow for extensive improvisation. Most of the time policies remain the same for a long amount of time.

Policies are usually created by senior management while procedures can be created by the lower-level staff. The language used in both is expected to be simple and easily understood by everyone. Procedures can supplement policies by showing employees how to implement them. The policies present the guidelines and the procedures give the flow of activity.

Types of policies

A lot of policies are essential for every business to have. Important policies include:

  • Code of conduct
  • Work health and safety
  • Anti-discrimination, harassment and bullying
  • Grievance

Code of conduct

The code of conduct is the set of rules, principles and responsibilities that everyone within an organisation needs to abide by. It describes how employees need to interact with customers, society and other third parties relevant to the business. It covers most departments of a company and encourages ethical behaviour and compliance by all staff. A code of conduct can help the company achieve its mission by establishing its values among employees. It will ensure that staff have a document to refer to when they want clarification on what is appropriate and what is not. Sometimes a code of conduct is required by law but it is necessary for a business to have one regardless.

Work health and safety

This policy focuses on the obligation of a company to create a safe environment for people, whether they work for the company or not. It can include instructions on how certain duties must be performed or how workstations need to be organised. Employers have a duty of care to stakeholders, to provide a workplace where reasonable measures have been taken to eliminate risk. A work health and safety policy assists in avoiding incidents or accidents and therefore prevents unnecessary costs. It shows that the organisation takes safety seriously and is committed to reducing workplace injuries. Risk assessments and incident reports can be very beneficial in ensuring employee, client and stakeholder welfare is prioritised.

Anti-discrimination, harassment and bullying

Anti-discrimination policies are important for building a comfortable work environment for all employees. Discrimination can occur due to many factors including race, age, sex, and disability. Organisations should also develop policies to prohibit harassment and bullying, not only for the benefit of employees but to avoid legal trouble. Discrimination can be direct or indirect, but both types can cause conflict between employees and reduce productivity.

How employees are treated at work can heavily impact their mental health which is why policies that discourage such behaviour are crucial. Managers need to be aware of staff bullying or of victims so they can stop it and enforce the policy’s expectations of promoting respect and equality. The last thing organisations want is a hostile work environment.


A grievance policy explains to employees the rules about raising concerns and filing complaints. What counts as a grievance should be clearly defined to avoid confusion. By resolving problems that occur, organisations can foster a supportive environment in which staff can share their worries. It can include a procedure employees need to follow in the case they have an issue, such as pay inconsistency, and steps management can take to address this issue. The grievance policy relates to the code of conduct, work health and safety and anti-discrimination policies. It outlines how employees and managers can deal with the guidelines of these policies not being followed.

Why policies matter

Without policies, employees have no rules to refer to when making decisions


A policy clearly sets out the rules and standards that the company expects all employees to follow. They are especially useful when hiring new people as managers can use the documents to communicate with them effectively. Policies reduce misunderstandings as all information is precisely provided to every member of the organisation. To increase clarity, a policy can be updated to reflect the changing work environment and protect both staff and the business.

Fair treatment

Policies ensure that all employees will be treated fairly and will be held accountable equally. They promote consistency as the same expectations apply to all employees regardless of their position. Policies such as the grievance policy encourage improvements, as complaints can be dealt with in a constructive manner that will make the work environment a better place for everyone. Diversity does not only apply to gender, race and culture. It also applies to different work backgrounds. Employees could have previously worked for many different organisations with different missions and expectations. Policies exist to remind employees of the guidelines of their current workplace and create an equal work environment.


A policy aims to reduce issues within a workplace and provide a collaborative work environment. There are many risks that could affect employee performance and by tackling problems, managers will be able to improve productivity and efficiency. They save time as they provide a reference for managers and remove the need for management to second guess their decisions. They support a coordinated approach towards achieving the company’s mission and vision and solidifying the organisational values. Many companies in the UK try to benefit from a ”triple dividend policy” by implementing a 4-day work week. 


Policies are essential for every business. Policies such as code of conduct, anti-discrimination, harassment and bullying and work health and safety are crucial in protecting employees and avoiding lawsuits. Some governments might mandate a certain policy while others can be optional. Businesses should shape their policies to fit their organisation and its vision. This will increase productivity, clarity and ensure fair treatment of all employees.