Why, When, and How to Develop a Company Policy

Strike the right balance between having too many and too few policies

Ask whether you need a policy and then get input from your colleagues.
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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. But if you try to create policies for every contingency, you won't have the management latitude you need to address individual employee needs. Having too many policies also increases the likelihood that managers will apply them unequally and unfairly.

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

Policy Guidelines

Consider creating a policy in these situations:

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

Articulate the Policy Goals

Once you've determined that 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 in the policy to make the company's position clear, but don't try to cover every potential situation.

Keep the policy as short and simple if possible, but some policies about legal areas—such as the company's approach to the Family Medical and 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 have trouble finding an example that is exactly right for your company circumstances, language, and culture, but you can use sample policies as a base rather than writing your policy from scratch.

You can also subscribe to a service that provides policy samples. The Society for Human Resources Management (SHRM) also provides policy samples for members.

In some cases, you may want to speak with your employment law attorneys to see what they have available. Especially when a new law passes or the Department of Labor issues new rules, law firms write generic policies for their clients that you can customize to your needs.

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 certain the policy is covering 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 several employees to read the policy and ask questions to determine if employees will be able to understand and follow it. Rewrite the policy based on the feedback.

Obtain Management Support and Legal Review

Review the policy with the managers who will have to follow the policy to get their support and ownership of the policy. Although you likely started this process when you identified the need for the policy, management support as you implement the policy is crucial.

If the policy has legal implications, is litigious by nature, or has personal implications for employees (such as security procedures), have your attorney review the policy before you distribute it. Make sure you communicate to your attorney that you want the policy reviewed for its legal implications and appropriate wording but do not want it rewritten in legalese.

Implement the Policy

Distribute and review the new policy to employees in small groups, individually, or in a company 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 Sign0ff Statement

This is a sample signoff statement to use:

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 You Will Communicate the Policy in the Future

Include the policy in your employee handbook. You may also want the policy to become part of your New Employee Orientation. Some companies place policies in 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.

Data and archive former policies that this policy replaces. You may need them for legal purposes or for 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.

Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a worldwide audience, and ​employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from state, federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.