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Why Do Policies Matter?

Why do policies matter?

Because they are the foundation of everything your employees do; good, bad and indifferent!

Policy adherence is the key to winning – it is the roadmap to success.

Broken policies are at the root of major losses.

And poorly created policies can be an absolute disaster.

Policies are also a major form of evidence. They are used for wrongful termination and human rights lawsuits against the employer, and they are used by the employer to substantiate a termination or prosecution of a dishonest employee.

The sad news is, very few organizations spend the time and effort needed on the front side to get it right. The best policies are typically the re-written version AFTER it is discovered in Court that the initial version worked against the business.

Getting policies documented correctly on the front side is critical.

I laid out the key pillars to building the right team in some previous material. Essentially you need to find the right person, onboard them the right way and treat them right.

On-boarding them right can have long-lasting effects on the employee. We often hear of an employer waiting 2 weeks to train an employee to see if they work out first. Allowing somebody to represent your brand without training is a cause for concern for sure. If you want more information on the on-boarding process I encourage you to review that material.

Are you set up with the proper policies?

Let’s assume you have the new employee, and you are going to train them from day one. Or is the training one of job-shadowing an existing employee.

If you are like most companies, the on the job training system is certainly a popular choice. But have you considered that training by osmosis breeds bad habits? It creates a culture of un-written policies.

One of the most commonly used documents in an employee termination case is the written policy. It can work for or against a company, and so it is critical to get it right on the front side.

A policy is meant to provide guidance. It is a deliberate system of principles to guide decision making and achieve a rational outcome. Policies can at times seem restrictive by the way they are written. From a morale standpoint, a policy should be written as an enabler to the business.

A policy defines a standard of conduct and must be reviewed periodically. They can become outdated very quickly and a regular review is good due diligence.

The following is a checklist that will help you keep some things top of mind when designing your policies;

Policy “needs assessment”

There are so many things that we do in retail that it is hard to figure out what should be documented and what just needs to flow. This is where you separate the art and science of retail. The science portion should be documented, and the art is the creative, and needs to be nurtured without the structural restriction of policy.

The “needs assessment” is the round up process, and it is best to collect everything first and then prioritize. It may seem odd, but something as simple as a crime against the company should be documented in policy. This allows you to take action for breach of policy, IF you choose not to take action for the criminal offence in court. It is a subtle difference but an important issue to protect the business.

Prioritize policies

Don’t bite off more than you can chew. Once you have rounded up all of the policy gaps, do a little triage. Figure out what is most important based on a risk assessment. You will be faced with many opinions from different people on what is most important. Deal with risk issues first (i.e. safety first!), legal issues next, human resources next…and so on down the line. The last policy on the list would be something like who gets which parking spot.

Draft the policy

Begin writing, but do it without emotion, and write defensively. Defensive writing is writing with fact, absent of colour such as adverbs and adjectives. Policies should not be written out frustration as a result of demanding behavioural changes.

Policies should be written as neutral as possible. If they are written in the heat of the moment to attempt to change behaviour, they may appear to be negative in nature and seem heavy handed.

It is important to make sure that all key stakeholders have visibility to a draft and have a voice in the creation of the policy. The best practice would be to have a committee review all policies, with representation from all of the key functions such as risk management, legal counsel, human resources and operations.

The structure of a written policy

There are a few critical pieces that must be included in the actual document. They include (1) policy name, (2) the policy owner, (3) who the policy applies to, (4) date written, (5) the version, (6) ‘review by’ date, (7) the purpose, (8) the full description, (9) an example of practical application, and finally (10) the signature of the key executive responsible for company policy. It is also important to indicate what the consequences are if the policy is not followed.


Once a policy is written, reviewed, and approved, the appropriate communication is important. If the policy effects the way people are doing their jobs, it is important to let them know if anything change and what those changes are to set them up for success. For the business, it is important to have a sign-off that the policy was read and understood, and to keep a record of this step.

Too often employees find that they have broken a policy not as a deliberate or malicious act, but simply because they did not know.

Policies should be made available and accessible to all employees. They should be retained in one central repository with one version of the truth. It is important when revising or replacing a policy, that other versions are not circulating within the company. The best practices in this area are policies that reside on-line, are not downloadable or printable, and older versions removed (NOT DESTROYED – as you may be asked for old policies in litigation)

The Litmus Test

Does the Policy reflect reality? This is not always the case and it is a good example for a review committee to test the policy to see if it is relevant to the current operation. A business could write a policy that is counterintuitive to the business needs and do more damage than good. Or a policy could even be written in such a way that it can not be adhered to in practical terms.

Here is an example of language in a policy that however subtle could have devastating legal consequences and cost for the business; Company ABC felt that their employees were taking advantage of weather conditions for absenteeism. In any effort to make a statement about this they stated in writing that Company ABC monitors all weather conditions and if the company deems the conditions to be unsafe, they will notify the employee.

The intention was to remove the decision making ability of the employee to determine that the weather conditions were not conducive to showing up for work on bad weather day. But what the company did is take on the needless responsibility of monitoring the weather every day in every geographic location where employees lived. But the reality was that this was not going to take place, nor could it effectively. And the unintended consequence is that the company took on the liability. In practical terms, if an employee were to get into an accident because of unsafe weather conditions, and prove they had not received an email from Company ABC about the risk, then Company ABC may as well just cut a cheque because it could be proven that it was their fault.

So you see, the bottom line is this – Policies are wonderful tools to help you direct your business as you see fit, to meet your goals, and to build a great product, compliant with all legal requirements. But they could also be the nail in the coffin if not thought through well. And that simply put, could cost you a fortune!

Hello, I'm Stephen O'Keefe. The information you read here is intended to help businesses answer some of the tough questions about everyday events in the retail environment. After spending over 3 decades in this industry we've seen a lot!
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About Stephen O'Keefe

As an independent consultant I leverage my experience and knowledge to help a number of companies achieve results. Clients range from non-retailers looking for guidance to serve their retail customer, to retailers looking for quick solutions to unique and costly problems, right to the Industry Association. Bottom line Matters!

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