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POSTED BY

Barry Albrecht

What's The Difference Between Policies & Procedures?

When it comes to economic development, there are several substantial differences between policies and procedures. Though people regularly confuse these words, they have distinct meanings that should be clarified and understood. Let's take a look at what procedures and policies really are, how they differ from one another and how they function in unison.

In order to strengthen our organization and to also better attract businesses to our thriving community, the Amarillo EDC is currently reviewing its policies and procedures.

A Definition of Policies

Policies are established as principles that determine an organization's direction. It serves as a course of action that steers decisions toward distinct ends. Policies help guide the decision making process amidst varying sets of circumstances. They establish a framework of specific management philosophies, aims and objectives.

One example of policies is a rule established for the workplace. Rules govern an organization's employees. Companies establish policies regarding sick time, paid time off, behavior at work and so on.

A Definition of Procedures

Procedures are specific ways of accomplishing goals. They create a platform for the implementation of the consistency required to reduce differences in processes. As a result, procedure control is enhanced.

Procedures are comprised of steps that must be followed in a consistent manner. Procedural steps are often followed in a repetitive or cyclical manner in order to achieve the intended result. Minimizing process variation is essential for the optimization of procedure control. Reducing process variation ultimately serves to heighten performance and reduce waste.

Once finished, procedures put established methods in place for an organization's operations. These methods prove vitally important for employee training, compliance purposes, process improvement and process auditing.

As an example, a procedure can be as basic as a checklist. Consider an inventory counting procedure. Those who work in warehouses perform counts of physical inventory at established points in time to make sure the general ledger balance is accurate. The point of such a procedure is to allow for consistency across the organization.

How Procedures Differ from Policies and How They Function Together

It is best to think of a procedure as a number of steps that must be adhered to in order to produce the intended result. A policy is more of an overarching principle that establishes an organization's direction. When properly used together, policies and procedures bolster the individuals responsible for processes and their improvement.

Procedure policy should be thought of as a mini-mission statement. Such a statement is made up of an intended purpose, the target user and an effectiveness measure to instruct users how the procedure functions.

In the above example of warehouse inventory counting procedures, the warehouse workers are the target users. The policy purpose is to obtain an accurate count of the warehouse inventory. The effectiveness measures for the policy are accuracy and frequency. The procedures serve to pinpoint the specific accuracy and frequency amounts. If inventory issues exist, these amounts can even be objectives for process improvement.

The Amarillo EDC promotes business expansion throughout Amarillo. We have recently renewed our focus on restructuring and the bolstering of procedures and policies. If you are interested in doing business in Amarillo or enhancing your current business, let us know! Contact us today to schedule an appointment. 

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