When you weigh the different priorities in your business, you realize that you could spend endless hours creating rules for employees, providing them with training and corrective feedback and helping them improve in their daily performance. At some point, however, it is important to step back and trust them to do their jobs. Well-written policies convey to employees what is expected of them, leaving you free to focus on other management priorities.

Internal Controls

Organizational policies serve as important forms of internal control. Look at a policy as a control mechanism that will effectively limit the behavior of some employees but not all employees. Your policy might be that two employees must be present whenever money is being counted and both employees must sign the record of money counted. Your policy must be enforced through some kind of auditing mechanism, or the policy will be a weak internal control. You can make your life easier as a business owner by creating simple internal controls that you can enforce.

Minimize Costs

Business owners also share the need to minimize costs. This can take the form of finding the best price for what the company needs, such as finding the cheapest suppliers without sacrificing quality. It can also be about limiting the financial losses that can cripple your business, such as the negative impact of employee fraud, errors and other kinds of losses. When you write policies that address potential sources of risk and require employees to know them, you create awareness of the need for risk management. It is best to ensure that employees comply with company policies intended to minimize risk. This can be reinforced with a well-written and comprehensive employee handbook that is kept up-to-date. It's not a guarantee against legal action brought on by an employee but when consistently applied, it is a vital risk management tool that provides that first-line defense against claims of wrongdoing.

Maintain Compliance

Organizational policies also help your company maintain a degree of accountability in the eyes of internal and external stakeholders. As the owner, you have an obligation to manage your staff or hire someone to do it for you. You also need employees to keep appropriate records and follow established policies and procedures. For example, keeping a paper trail of newly hired employees that you've trained gives you proof that you are involved in ethical human resources practices. With the fast-pace constantly evolving regulation world, reviewing even your most basic policies and procedures at least once a year would help you stay current.

Build a Learning Culture

Create a learning culture in your business by encouraging employees to continuously add to their job knowledge. This includes determining which policies each employee should read and creating a process for updating policies throughout the year. For example, a checklist that every new hire must complete before becoming eligible to perform routine job tasks is essential. The initial job you learn should include a checklist of items, such as required readings and training, work samples and formal introductions. Think of this culture as a glue that keeps your business together. It may go unnoticed, but it is key in outlining how things get done and making sure they get done.