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Company Policy

What is company policy?

A Company Policy is a set of guidelines for employers and employees to follow the defined procedures. It is a set of rules established for the business interest of the employer and right of employees. A Company Policy is constructed based on the structure of the business. It is implemented to manage certain areas within an organization such as; company culture, dress code, health, safety, communication, mobile phone for personal use, tea and lunch breaks, smoking rules, harassment policies, internet policies, communication with clients, employee accountability, warnings, leaves, attendance, timing, security, poor performance, dishonesty, salary date, expenses, etc.

A Company Policy is ideally handed over to each employee at the time of employee orientation that takes place right after hiring. Nowadays companies use HRMS (Human Resource Management System) solutions to store such important documents in a unified location that saves a lot of time.

Why are policies important in the company?

The importance of company policies becomes evident when it provides clear guidelines and procedures for employees to follow, ensuring consistency and compliance with organizational values and legal standards. The policies and procedures of a company create a safe, ethical space and bring harmony among employees. Well-structured company policies pave the way for employees to strive towards individual and collective growth.

What are the types of company policies?

5 common place company policies/workplace policies to have in writing:

Workplace Health and Safety Policy:

One of the most significant qualities that make an organization a suitable place to work is its healthy and safe practices and laying down these procedures in an elaborate and clear to understand manner really makes a stark difference. Nobody wants to work in a place where the lighting is not proper, conditions are unhygienic, the floor is slippery, and surroundings are exposed to hazardous substances and equipment. It is the right of every employee to work in a healthy and safe environment. To ensure this, a proper workplace and safety policy must be in place and implemented with accountability.

Equal Opportunity Policy:

In most countries, the law says that companies must treat everyone equally when it comes to jobs. This means they must not be unfair to people on account of their gender, age, caste, or race. This rule is important for ensuring there’s no discrimination, harassment, or violence at work and for having a diverse group of people working together.

It is good for businesses in two ways: First, it gives them a bigger group of people to choose from when hiring, so they can pick the best person for the job. Second, it makes the workplace fair for everyone, so employees can get along, work well, and do their best. When a company puts this rule in writing, it tells everyone that they really mean it when they say everyone has an equal chance there.

Employee Code of Conduct Policy:

An Employee Code of Conduct Policy is a set of guidelines that explain how employees should behave while they are at work. It covers diverse topics like following the law, dressing appropriately, being responsible for their actions, avoiding conflicts of interest, and not taking financial gains that could affect their job. This policy is important because it helps employees understand the company’s values and culture, ensures legal compliance, and maintains a positive work environment. It also provides rules for handling workplace issues, such as conflicts of interest and ethical behavior. Violating this policy can result in disciplinary actions. This policy is regularly reviewed and updated to keep it relevant and effective.

Leave of Absence Policy:

A Leave of Absence Policy allows employees to request specific periods of time off from work for several reasons, such as family caregiving, health issues, or personal needs. This policy outlines the process for requesting and approving leaves, balancing employee needs with the company’s operational requirements. While on leave, employees may not receive compensation, but previously accrued benefits should be maintained. Leave types can include parental leave, voluntary leave for personal reasons, and mandatory medical leaves. You can also add birthday leaves, comp offs, floater leaves to incentivize the arduous work put by employees. Employers should follow established policies, contracts, and legal requirements when granting leaves to ensure a positive work environment and legal compliance.

Employee Disciplinary Action Policy:

Disciplinary action refers to corrective measures taken by employers in response to employee misconduct, rule violations, or subpar performance. It can encompass various forms of reprimand, ranging from verbal warnings for minor infractions to more severe actions like suspension, demotion, or termination for serious violations. Supervisors and managers decide when to apply disciplinary measures, considering factors such as the nature of the offense, the employee’s history, and experience. Fairness and consistency are crucial in implementing disciplinary policies, ensuring a healthy workplace culture, and protecting both employees and the company. Employers may employ tools like discipline matrices to align consequences with specific policy breaches, ensuring proportionate responses to different violations.

How to create Company Policies?

Get Everyone Involved: Start by gaining unanimous support from management and employees for the new policy. Clearly explain the reason behind it and why it is necessary.

Policy Team: Developing company policy must involve collaboration. Build a team of knowledgeable people and experts in policy making. Their contributions ensure a comprehensive and effective policy.

Structure Your Policy:

Create a standardized structure for your policies. Although details may vary, they should always include:

1. Goals: Determine the goals and objectives of the policy.

Instructions: Describe specific rules, instructions, and any regulatory changes that employees must follow.

2. Applicability: Make it clear who will follow the policy and how they can comply with it.

3. Effective Date: Specify when the policy takes effect.

4. Glossary: Includes a list of key terms and their definitions for clarity.

Policy Priorities: If you need to create multiple policies, prioritize them based on immediate needs and short-term benefits. Focus on policies that deliver rapid improvement.

Do Your Homework: Before writing a policy, thoroughly research the company and the purpose of the policy. This ensures that your policy is well informed and effective.

Research Methods: Consult experts in the relevant field. Collect feedback through company surveys and employee interviews. Stay up to date with relevant laws and regulations, especially those related to the subject matter of the policy.

Flexible Language: Remember that company policy is not a rigid contract. Write it in flexible language so it is easy and engaging for employees to follow. This will guide behavior without appearing too strict.

By following these steps, you can create a company policy that is well-informed, widely accepted, and benefits your organization and its employees.


1. What is the difference between company policies and procedures?

Company Policy:

Think of policies as the big rules and principles of a company. They tell you what is right and wrong, like the company’s values and the things you must do or must not do. Policies are like the boss’s orders that everyone needs to follow.

Examples: Rules about fairness, respect, and not discriminating.


Procedures are like step-by-step guides for doing specific tasks at work. They show you exactly what to do, like a recipe for making cookies. Procedures make sure everyone does things the same way for consistency.

Examples: Steps to follow when handling customer complaints or requesting time off.

2. What is a workplace policy?

Workplace policy refers to the rules and guidelines set by an employer to guide how employees should behave and conduct themselves in the workplace. These policies can be written down or simply followed as common practices. They help create a structured and respectful work environment, ensuring that everyone knows what is expected of them while on the job.

3. Are company policies legally binding?

No, company policies are not legally binding. But it is advised that these policies nonetheless get documented and implemented. This ensures a well-functioning and positive workplace environment.

4. Can a company change its policies without notice?

Yes, a company can change its policies without prior notification of the same. However, it is a better practice to keep the employees informed beforehand upon making changes in the policies that affect them directly or indirectly.


Company policies are essential because they provide staff with clear instructions, ensure consistency, and uphold both company values and legal requirements. In essence, properly constructed company policies establish a secure and moral workplace, promoting cohesion among employees and promoting both individual and group development. Though not legally binding in nature, not adhering to these policies can land you in trouble and propagate mismanagement in the company.


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