Tuesday, January 6, 2009

HR Policy - What is your Policy?

Comedian Dimitri Martin repeats the old adage “People who live in glass houses shouldn’t throw stones.” Then he adds “My policy is: No stone throwing regardless of housing situation.”

That’s a good policy. But as Dimitri points out, even the best of polices should have an exception. “If you are trapped in a glass house and you have a stone - throw it,” he explains.

You Know Not to Throw Stones…

It would be nice if policy setting was as easy as this example, but setting good policies is difficult. They are also important, serving as guideposts that can help keep your organization on track. You can learn a lot about an organization’s culture by reading its policies. How it feels about its employees, its customers, and where its priorities lie.

A quick reminder, though, that most organizations actually have two types of policies. The first are the employee rules maintained by the Human Resources department. These are necessary to ensure rules are applied fairly across the board so certain employees are not treated more favorably, in terms of attendance, discipline, or reimbursement, for example.

Policy as a Goal

The second type of policy, the one we are more interested in for our discussion, involves creating statements that serve as guidelines for executing the organizations strategies and priorities. If customer service is a priority, then company policies should state high-level customer service goals, such as answering calls promptly and resolving issues in a timely way. Then these high-level goal statements should then be fleshed out by department managers with specific objectives that fulfill the goals. For example, 95% of incoming customer service calls answered by the fourth ring, all customer questions or issues completely resolved within 1 business day, or same day shipping.

Good policies are usually developed by reflecting on how to operationalize strategies, set priorities, and address existing risks. An overlooked step in some organizations is clearly communicating the policies to the team members. Too frequently it is assumed that the meanings and motives behind a policy are obvious, but such assumptions are a mistake. Clear communication about the logic and importance (in terms of success) of policies is a key to creating buy-in, which obviously leads to better compliance.

But even more importantly, making sure employees understand policies thoroughly will also help them recognize when a situation calls for an exception. Being able to empower front line employees (especially those interacting with customers) is always a good thing, and the greatest impediment to good decision making is a lack of information. Training and communication on policies and policy development is one way to help alleviate this problem.

A Policy for Creating Policies?

So good policies are created by clearly stated company goals, and recall that our discussion of policy involves standards for achievement - not rules. Bad policies, on the other hand, can be a result of knee jerk reactions to a specific incident or occurrence. They are not well-thought out and are not based on fulfilling an over-arching strategy or priority. Some bad policies, however, are created because of misguided goals.

I read about a gourmet coffee chain recently, describing their policy of when the line of customers grew too long a staff member would take an order pad and pen out to the line and begin collecting orders from those in line and those queuing up. The odd thing about this policy was that it really didn’t get drinks to customers any faster. There were still the same number of cashiers ringing up sales, and the same number of baristas making the drinks. In fact, one could argue it actually slowed the process down.

But it turns out the goal of this policy was not to reduce the wait for drinks. The real goal of the policy was to make customers coming in and getting in line to feel obligated to stay and purchase the drink. Having placed an order, customers were much less likely to ditch the long line and go somewhere else. How is that for a customer focus?

A useful policy here should be to serve drinks fast enough to satisfy customers, not to lay a guilt trip on customers to keep them from leaving (happy or unhappy). I can’t help but think that if as much thought and effort was put into to creating the proper policy (backed by processes) to deliver drinks satisfactorily during a rush as was put into playing mind games with customers, a win-win situation would be created for customer and company. As is, this policy only benefited the company at the expense of the customer. While such policies might create a short term benefit, over the long haul it alienates customers and creates cynical employees.

So the question isn’t really just “what is your policy,” but “why is it your policy” as well. What is being accomplished? Who benefits? Who suffers? What message does it send? What direction does it take the organization? What does it say about your organization?


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