8/13/2019 Reviewer Quiz 3 - POLICIES

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POLICIES, RULES AND PROCEDURES

Policyit is a verbal, written or implied guide setting up boundaries and directions within which managerial decisions should

take place. It is a guide to decision making.

Ruleit is a prescribed course of action which must be followed. It is a guide to individual action.

Procedure it is a series of related task that make up the chronological sequence and the established way. It is a guide to

action.

Role of Policies

1. It is a valuable in fixing definite objectives for the organization.2. It reduces the problem of misunderstanding.3. It provides strong coordinating influences that tend to hold the organization together especially where there is a

much division of labor.

4. It permits decisions to be decentralized to the lowest level of management.5. It allows subordinate executives to make fair and consistent decisions in recurrent problems.6. It promotes uniformity of action.7. It tends to eliminate errors, red tapes, inconsistencies in action and to prevent unfairness in handling individual cases.

Policy Formulation

Policies may come from the following:

1. Top management. The top management may formulate and issue a policy. When the top executive is presented witha problem, his decision becomes a policy.

2. Committee. Policies may also be formulated by the committee, the board of directors or the key men in theorganization.

3. Practices. After certain practices, procedures, actions and precedents have been consistently followed for some time,they become policies.

Types of Policies accdg to Origin

1. Originated Policy it comes from the board of directors or the president and is intended to set up guidelines in theoperation of the firm.

2. Appealed Policyit is born when problems arise at lower levels of the organization and the man in charge does notknow how to meet the problem.

3. Imposed Policyit comes from the government in the forms of laws, administrative orders and rules and proceduresor contract specifications.

Other Types of Policies

1. Distributive Policiesprovide various benefits2. Regulatory policies are policies the limit discretion of individuals and companies to make decisions freely and are

supported by threat of sanctions or fine

3. Redistributive policiesprovide benefits to various groups at the expense of other social groups4. Constituent policiescreate executive power entities or deal with legislative changes

Forms of Policies

Official Government Policy (legislation, guidelines that govern how laws should be put into operation) Broad ideas and goals in political manifestos and pamphlets A company or organizations policy on something, eg. The equal opportunity policy of a company shows that the

company aims to treat its entire staff equally.

Various Means of Announcing Policies

Employee handbooks Company organs or publications

Memoranda and circulars Company bulletin boards Meetings or conferences

Major and Minor Policies

1. Major Policiesalso termed as company policies that deal with the fundamental nature of the firm, with its identityand with the direction in which it is expected to move. They provide a framework within which the objectives can be

established.

2. Minor or Operating Policies the operating policies of a firm flow out of its objectives; its strategy and itsorganization. The objectives plus the policies define the character or personality of the firm. Operating policies take

the form of statements that tell managers how they should act in specific situations which occur frequently.

Implementation of Personnel Policies

The problem with many firms is that while their personnel policies are satisfactory, some of these are not properly

implemented owning to:

8/13/2019 Reviewer Quiz 3 - POLICIES

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Lack of provisioning for their implementation Lack of specific official who implements the policy Lack of uniformity and consistency in the application of the policy Impracticability of the policy itself due to changed or changing conditions and failure of management to amend it

Why Policies are needed?

To achieve teamwork, the operating supervisors and foremen should know what top management wants done. This is

especially necessary in personnel relations. Policies are valuable in fixing definite objects for the organization. To avoid any

misunderstanding about policies, they must be written in clear-cut language. A written policy clearly communicated to theemployees reduces the problem of misunderstanding. Good relationships between management and employees, and among

the employees themselves, are best maintained if there are guides for such relationships.