Why, When, and How to Develop a Company Policy

Strike a balance between too many and too few policies

Workers review ideas at a whiteboard
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Company policies and procedures ensure a safe, organized, convivial, empowering, and nondiscriminatory workplace. Policies protect employees from a free-for-all environment of favoritism and unfair treatment. Be careful not to create policies for every contingency, though, because management won't have the latitude to address individual employee needs. An overabundance of policies increases the likelihood that managers will apply them unequally and unfairly.

You can strike a healthy balance. In most circumstances, if you directly address employees who are behaving in ways inappropriate to your workplace, you may not need to develop a new company policy.

Policy Guidelines

Consider creating a policy in these situations:

  • Confusion about the most appropriate way to behave (dress codes, email, internet policies, or smartphone use)
  • Guidance for handling common situations (standards of conduct, travel expenditures, or purchase of company merchandise)
  • Legal protection for the company (head off charges of harassment or discriminatory hiring and promotion)
  • Compliance with governmental laws and agencies (Family and Medical Leave Act, the Americans With Disabilities Act, the Equal Employment Opportunity Commission, or minimum wage)
  • Establish consistent work standards, rules, and regulations (progressive discipline, safety rules, breaks, or smoking rules)
  • Provide consistent and fair treatment for employees (benefits eligibility, paid time off, tuition assistance, bereavement time, or jury duty)

There may be other reasons to develop a policy, but don't let one employee's poor behavior force implementation of a policy that will affect others.

Articulate the Policy Goals

Once you've determined a policy is necessary, document in writing your goals for creating the policy. When possible, tell employees why you are implementing the policy. Include enough details to make the company's position clear, but don't try to cover every potential situation.

Keep the policy short and simple if possible. Some policies about legal areas—such as the company's approach to the Family and Medical Leave Act, discrimination or complaint investigation, or the progressive discipline system—may need to be lengthy and comprehensive.

Gather Information

Check out sample policies. You may not find an exact fit for your company's circumstances, language, and culture, but you can use these as a starting point. You don't have to start from scratch.

The Society for Human Resources Management (SHRM) provides policy samples for its members. Other sources are your employment law attorneys. Law firms typically write generic policies their clients can customize whenever a relevant law passes or the U.S. Department of Labor issues new rules.

Develop, Write, and Review the Policy

Write the policy using simple words and concepts. Speak directly to the employees who will be reading, enforcing, and living by the policy.

After each paragraph, ask yourself "what-if" questions to make sure the policy covers the basics and normal exceptions and questions. Do not obsess over this, however; no policy will cover every possible contingency.

Select a pilot group of employees to read the policy and ask questions to determine if employees will be able to understand and follow it. Adjust based on the feedback.

Obtain Management Support and Legal Review

Review the policy with the managers who will have to follow it to get their support and ownership of the policy. It's likely this process started when you identified a need, but management support is crucial for implementation. It's also a good idea to show it to your attorney to avoid any legal challenges down the road.

Implement the Policy

Distribute and review the new policy to employees in small groups, individually, or in a company-wide meeting, depending on if the policy is controversial and how easy it is to understand. Give employees a chance to ask questions.

Provide employees with a copy of the policy and ask them to sign off that they have received and understand it. They should retain a copy for their own files.

Sample Policy Sign-Off Statement

I acknowledge receipt of and understanding of the [Your Company] policy. The policy is effective [Date] until further notice.


Employee Signature


Employee Name (Please Print)



Decide How to Communicate the Policy in the Future

Include the policy in your employee handbook. You may also want the policy to become part of new employee orientation. Some companies place policies on their intranet or in a policy folder on the computer network's common drive. Determine if you want to distribute the policy by additional methods as well.

Date and archive any former policies this one replaces. You may need them for legal purposes or reference.

Interpret and Integrate the Policy

Your policy application and work practices will determine the real meaning of the policy. Remember to be consistent and fair as you interpret the policy over time. If you find your practices differ from the written policy, review and rewrite the policy as needed.