Businesses know that they need to have a system made up of policies, processes and procedures. Often businesses have issues discerning which is which or use the terms interchangeably, resulting in them lacking one of the elements. All three, however, are necessary to run a successful, organized business.
What is a Policy?–A policy is a guiding principle used to set the direction in an organization. It acts as a governing framework within which the organization operates. Policies are typically broad, outlining the intent of organizational governance, and they set the standard for the desired behavior of employees. For example, a company may have a data privacy policy that stipulates the commitment to protecting client information, reflecting its values and compliance with relevant laws. It ensures consistency and compliance with the company’s mission, values and strategic goals, and serves as a guideline for procedures. Most of the time, policies are made by upper management, which uses policies to guide their decisions. Within a policy, you should explain what it is about, why it is required, what department it falls under and who is responsible for executing and enforcing it.
Related Article: 10 Common Policies That Every Company Should Have
What is a Process? – A process crosses departments, and explains how to produce a product or service. It follows the company’s rules, or policies, while giving a high level view of how something should work. Within a process, you should include who is responsible for executing it, what tasks should be performed and when they should be performed.
What is a Procedure? – Procedures, on the other hand, are the specific steps that need to be taken to adhere to the policies. They are detailed, providing exact instructions on what actions are to be performed, by whom, and under what circumstances. Continuing with the data privacy example, a procedure might detail how employees should securely handle and process personal data, specifying tools to be used, the methods of secure storage, and protocols for breach notification. While a process is a broad overview, a procedure is more detailed, offering step-by-step instructions on how to perform part of a process or a specific task. Because procedures are used by employees the most, their input is often sought in their creation; procedures are the practical applications of the policies created by upper management. Within a procedure, you should describe who performs it and what steps are performed, as well as when and how they are performed.
What is the difference between a policy vs procedure?
In essence, if a policy lays down the ‘what’ and the ‘why,’ procedures outline the ‘how.’ Together, they ensure that an organization’s activities align with its values and comply with applicable laws and regulations, thereby facilitating effective governance and operational excellence.
Policy Example:
The company has a "Travel and Expense Policy" aimed at managing the expenses incurred by employees during business travel.
This policy might state:
- Objective: Ensure that all business travel is necessary, economical, and in the interest of the company.
- Scope: Applies to all employees of the company who undertake travel on behalf of the business.
- Policy Statement: Employees are expected to spend company funds prudently. Travel expenses should be budget-friendly, necessary, and have the approval of the relevant manager prior to booking.
Procedure Example:
Following the policy, the procedure would provide detailed steps on how to comply with the travel and expense policy. This might include:
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Pre-approval: Employees must submit a travel request form to their manager for approval at least two weeks prior to the planned departure. The form should include the purpose of the trip, destination, estimated costs, and expected outcomes.
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Booking Travel: Once approved, travel should be booked through the company’s designated travel portal to ensure compliance with preferred pricing and vendor agreements. Employees should choose economy class for flights under 6 hours.
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Expense Reporting: After the trip, employees are required to submit an expense report within one week, along with receipts for all expenditures. Reimbursements are processed only for approved expenses that align with the policy limits.
In this example, the policy provides the overarching principles and expectations related to travel and expenses, promoting fiscal responsibility. The procedures give employees a clear, actionable series of steps to follow, ensuring that these principles are implemented effectively and consistently.
What is the difference between a process vs procedure?
A process is a higher-level sequence of activities or tasks that produces a specific outcome or change. It involves multiple steps and may require the coordination of various resources, departments, or systems to achieve a particular objective. A process has a more macro view, focusing on the end result and typically involves inputs, throughput, and outputs.
A procedure, as mentioned earlier, is a specific way of performing a task or activity. It provides detailed, step-by-step instructions on how to carry out a part of a process. Procedures are more micro in nature and are focused on consistency, detailing the exact manner in which tasks should be completed to meet the desired outcome of the process.
Example: Hiring Process and Interview Procedure
Process Example: Hiring Process
The hiring process is a complex series of steps an organization uses to attract, select, and onboard new employees. This process includes:
- Job Posting: Identifying the need for a new hire and creating a job description that is posted on various platforms.
- Candidate Screening: Reviewing applications to shortlist candidates based on their qualifications and experience.
- Interviewing: Conducting interviews to evaluate the shortlisted candidates.
- Offer and Onboarding: Making an offer to the selected candidate and conducting onboarding for the new hire.
Procedure Example: Interview Procedure
One part of the hiring process is the interview, and there is a specific procedure for conducting it:
- Preparation: Schedule the interview and prepare the list of questions and evaluation criteria.
- Conducting the Interview: Greet the candidate, explain the structure of the interview, ask questions, allow the candidate to ask their questions, and take notes.
- Post-Interview: Score the candidate based on the predefined criteria, discuss with other interviewers if needed, and document the feedback.
In this context, the hiring process is the broader sequence of events aiming to acquire a new employee, whereas the interview procedure is focused on the specific tasks and conduct of the interview part of the process. The procedure ensures consistency and effectiveness during each interview, contributing to the overall success of the hiring process.
Scale and grow your business
Setting up systems of policies, processes and procedures might take a lot of legwork up front, but will ultimately make your employees more efficient and confident in their work in the end. With policies, processes and procedures in place, you take the first step in being able to scale and grow your business.
As your organization grows, a policy, process and procedure management system can help organize the growing number of documents you have and streamline the workflow, from policy creation through distribution and employee acknowledgement. At ConvergePoint, we not only help regulatory compliance teams make the policy workflow more efficient, but we also partner with organizations to help them structure their policies, processes and procedures, positioning them for continued growth.
Learn more about why policies, processes and procedures are essential to running an efficient, safe and profitable organization by reading the free White Paper: Streamlining the Policy and Procedure Management Lifecycle.
