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Company Policies Your New Business Needs

Max Freedman
Max Freedman

Developing well-thought-out company policies helps establish clear expectations for your employees and can protect your business from potential legal issues.

  • Company policies establish codes of conduct for employees and employers.
  • These policies can cover basic interactions, more specific needs such as selling and expensing, or more serious matters like substance abuse.
  • To create and implement company policies, determine the gaps you need to address, and work with your team to craft corresponding policies.
  • This article is for new business owners who want to develop company policies to govern their employees and workplace.

High employee morale and engagement high can help drive your business's success. Company policies can reinforce these factors and empower your company to thrive – especially if your business is just getting started.

Whether you've opened your doors with robust company policies in place or you've gotten started without policies, you can always improve your office operations. Before creating or updating your policies, you should understand the different types, which ones your business needs and how to implement them.

What are company policies?

Company policies are rules that govern a company's code of conduct. They apply to both employees and employers, and they may govern conduct both within and outside the workplace. Company policies are usually written policies included in your business's employee handbook.

Most employers who set company policies do so to ensure their employees have certain guaranteed rights, potentially strengthening morale. A workplace with firm company policies may be less prone to employee dissatisfaction or, worse yet, lawsuits from current or former staff.

Key takeaway: Company policies determine how employees and employers should interact, behave, and work both within and outside the workplace.

What types of policies do companies have?

There are many types of company policies that employers may set. These are some of the most common.

Employee conduct policies

An employee conduct policy sets the rules that all workers must follow during their employment with you. It governs everyday matters, such as workplace dress code, and more severe infractions, such as sexual harassment. When it comes to legally enforceable matters such as sexual harassment, a firm company policy banning (and defining) sexual harassment can shield your organization from liability should a lawsuit arise.

Employee conduct policies may also address these issues:

  • Workplace safety
  • Acceptable workplace behavior
  • Acceptable workplace computer and internet use
  • Abuses of power, such as bullying of colleagues or subordinates
  • The definition of a hostile work environment and how to avoid it
  • Provisions for maintaining these policies during remote work or other out-of-office interactions

Employee conduct policies may also include routes for disciplinary action if employees fail to adhere to them. In early cases of misbehavior, disciplinary action may be simple warnings, but in later cases, disciplinary action may be termination.

Anti-discrimination and equal-opportunity policies

According to the U.S. Equal Employment Opportunity Commission, sexual harassment in the workplace is a form of sex discrimination. Anti-discrimination and equal-opportunity policies may go further than employee conduct policies in firmly banning sexual harassment and other forms of prejudiced behavior. They may also ban team members, hiring managers and management teams from interacting with colleagues differently based on race, gender, sexual orientation, age, religion or other personal demographics.

Social media policies

A company social media policy can govern several types of employee behavior. It can achieve a uniform voice across the company's social media channels. A robust social media policy can also govern not only employees' social media use during work hours, but what employees can and can't say about the company both during and outside work hours.

Workplace security policies

To protect your company's office space, belongings, intellectual property and cloud-based work tools, you may want to implement workplace security policies. These policies designate the identification that employees will need to show to enter company property, especially outside work hours. They may also determine how employees can sign out work items, such as laptops, if they need to be taken from the office.

Workplace security policies may also address cybersecurity practices in greater depth. Cybersecurity policies may determine how often employees must change their passwords, mandate passwords of a certain strength, and limit employee use of personal devices brought into the workplace from outside the office.

Attendance policies

Attendance policies determine the times when employees must be present for work. They may also include provisions for remote work and procedures for informing supervisors of late arrivals or early departures. Time-off policies tend to comprise a large subsection of company attendance policies.

A time-off policy should include provisions for sick leave, personal days, vacation, voting leave and other forms of work absence. You should clearly state how many days each employee gets for these forms of absence before potentially facing disciplinary action or termination. (Many states have laws that determine how employees can accumulate sick leave and use it over the course of a calendar year, so look up laws for your state before setting a policy.)

Substance abuse policies

Many employers mandate drug testing during not just the job application process but employment. Substance abuse policies explain a company's testing policies and may also ban employees from using drugs, tobacco or alcohol during work hours and even outside them.

Expense policies

Sometimes, your employees will have to spend money on your company's behalf. Expense policies determine which categories of employee spending are reimbursable, how these expenses should be tracked and recorded, and how your company will repay employees for these expenses.

Selling policies

If your company has an in-house sales team or you hire independent contractors for sales purposes, you may want to establish selling policies. Selling policies establish how your company's salespeople should interact with current and potential clients. Whereas most company policies should be written, some experts argue that a sales policy can be established verbally.

Personnel policies

A personnel policy may combine threads from each of the aforementioned types of policies while expanding on them. It may cover sexual harassment, discrimination, attendance, time off, security, and substance abuse while also discussing employee compensation, benefits, rights to privacy, and methods for filing grievances. In some cases, personnel policy is entirely synonymous with an employee handbook.

Key takeaway: Company policies can cover employee conduct, anti-discrimination measures, social media use, workplace security, attendance, substance abuse, expensing, selling and personnel issues.

How to determine the types of policies you need

To determine the types of policies you need, look at your team and workplace for problem areas. These areas should inform your new policy choices.

  • If you see that your employees are using social media too much during work hours, you may need a social media policy.
  • If you struggle to track how your employees are using your company money, you may need an expense policy.
  • If your employees claim that other employees have sexually harassed them, you may need an employee conduct policy.
  • If your employees are struggling to arrive at the office on time, you may need an attendance policy.
  • If your sales operations are expanding, you may need a sales policy – and since your operation is expanding, a universal written policy may be superior to a verbal policy.

If you already have relevant policies in place but these problem areas persist, you may want to modify your current policies instead of creating new ones.

Key takeaway: To determine the policies your company might need, identify problem areas and think about how you could address them.

How to develop company policies

Follow these steps to develop your company policies:

1. Set goals.

We previously mentioned that you should identify problem areas to know which company policies to instate. Setting goals is similar: Determine what you intend to achieve with your new or modified company policies before setting them.

Include these goals in the text of the written policy. This way, your employees know why the policy exists and how to adhere to it. Ideally, your policies will err on the short side while remaining comprehensive.

2. Build your policies from samples.

Even the best-intended company policies may not be successful. That's why you should refer to sample policies when crafting yours. Surely, if you have a certain policy you mean to implement, then other companies have implemented similar policies – and you can use theirs to guide yours.

3. Create the policy.

With your goals in mind, sample policies at your side and a commitment to keeping them concise, you should draft your policy. Gather employee input throughout the creation process and modify your policies based on this feedback. To ensure a comprehensive policy, think of some realistic workplace scenarios and apply your policies to these events. If your written policy mostly achieves the desired outcomes, then it should be good to go.

4. Get your management and legal teams on board.

If you need your company's management to sign off on your new policies, you should get this approval before fully implementing them. If you have a legal team, they should ensure that your policies minimize your company's liability in a wide variety of scenarios.

5. Add the company policy to your employee handbook.

Once it's complete, add the new policy to your employee handbook. Then, reissue the handbook to your employees, indicating where they can find the new policy. Tell your employees to read it, inviting them to provide feedback and ask questions.

6. Have employees sign it.

With the policy complete and reviewed by staff, your employees need to sign it to confirm that they have read and understand it. Each employee should keep a signed copy of the policy in their records.

Key takeaway: To craft effective company policies, you need to set goals, use samples as your guide, and work with your team to establish rules that everyone finds fair.

What are examples of company policies?

Now that you know the types of company policies, how to decide which policies you need and how to implement them, you may want to look at examples and templates of company policies to get a feel for how you can craft yours. Here are several templates you may want to review:

Image Credit: fizkes / Getty Images
Max Freedman
Max Freedman
Business News Daily Contributing Writer
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.