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Project Management Toolkit
The "how-to" summary
- Overview
- Corporate Policies and Procedures Defined
- Manual Structure and Content
- Forward Plan Outline
- Recommendation
- Development
- Maintenance
- Compliance
- Format
- Layout
- Style
- Resources
1. Overview
A thoughtfully developed and fully communicated set of corporate policies and procedures should provide significant benefits to [the Company]. First, it can help eliminate duplication of effort, define more efficient ways to handle business activities, and provide for effective and accurate methods to execute company transactions. Secondly, training can be more effective through communication of documented company policies and procedures to new employees. Thirdly, more effective management control may be achieved through policies and procedures.
This summary outlines the primary considerations for the development and maintenance of corporate policies and procedures at [the Company].
2. Corporate Policies and Procedures Defined
There are many different levels of detail at which policies and procedures may be developed. These levels may range from a broad policy statement to a very detailed set of desk procedures. In developing corporate policies and procedures, the level of detail to which policies and procedures should be written is an important management decision. There are many levels of detail. For illustration purposes, we have described five levels of detail as follows.
- Corporate Policy
Directive from top management to [the Company] at large, instructing every manager to act in a prescribed manner. These are guides to decision making. Their purpose is first to define the area within which a decision is made and then to prescribe that the decision will be in line with overall plans and goals.
- Corporate practice
Guidelines and methodologies for the application of policy. Practices outline, in general terms, how a policy should be carried out. They normally include the action requirements of more than one individual. They may be referred to as high level procedures.
- Corporate procedures
Directions necessary to execute the policy. These detailed directions generally elaborate on a certain point(s) contained in the practice statement. This level of detail does not contain departmental or desk procedures.
- Department procedures
Detailed directions to execute application of policy within a given department. These procedures may be either a more detailed description of corporate procedures or they may be procedures designed and written by the department manager to execute daily operations of his/her department.
- Desk procedures
Detailed directions to execute applications of policy by a specific individual within a department. These procedures may be either a more detailed description of corporate procedures or they may be procedures designed and written by a department manager/ supervisor to execute the daily operations of an individual's job.
3. Manual Structure and Content
The policies and procedures deemed by management to be necessary will be developed and fully communicated to the organization. We recommend the policies be grouped into separate manuals by functional area of the organization. For example:
- Corporate organization
- Administration
- Human Resources
- Sales
- Production
- Financial Control
- Electronic Data Processing
- Facilities Management
- Information Services
- Project Management
- Construction
- Acquisitions
- Marketing
- Other
4. Forward Plan Outline
We have adopted the following strategy for developing corporate policies and procedures:
- Select policies and procedures to be developed by using the priority ranking methodology.
- Estimate the manpower and other resources required.
- Define a project life span that will achieve both management's need for corporate policies and procedures and distribute the workload over a reasonable time period.
5. Recommendation
Sample Paragraph:
Considering the above summary of the policy and procedure concept and the current status of the Accounting and Finance Department review, we recommend developing the Department and Desk procedures for the Accounting and Finance departments initially, including Corporate policy and procedure relating to these two departments. The policies and procedures developed should be presented to the Management Systems Implementation Committee for approval since this committee has the overall responsibility for Accounting and Finance Department review.
Development, Maintenance and Compliance
6. Development
Development of corporate policies and procedures should be accomplished through the guidance of a Corporate Policy Committee and a Corporate Policy Team. The principal duties of the Committee will be to establish direction and priorities for policy development and revision and to approve corporate policies and procedures. The committee should be staffed by individuals from all areas of the Company. These individuals should possess a thorough understanding of the organization and the organization's goals and objectives. The principal duties of the Team will be to research and develop policies and procedures as defined by the Steering Team.
Sample Paragraph:
Development of corporate policies and procedures for [the Company] will require a major coordinated effort. Currently, written policies and procedures are limited to just a few "recognized" procedures and policies. We have begun the development of policies and procedures in the accounting and finance areas, but other areas of the company should eventually be addressed. As a result, the initial project will require significant resources. However, once the initial project has been completed, the resources required to maintain existing policies and procedures and to develop new ones will be substantially reduced.
COMMITTEE APPROACH
To develop policies and procedures either in an initial project or subsequently, we recommend the creation of a Corporate Policy Steering Team (Steering Team) to review and approve all corporate policies and procedures. We also recommend the creation of a Corporate Policy Team (Team) which will be the supporting staff resource for policy research and development.
The duties of the Corporate Policy Steering Team will include:
- Accepting all reasonable requests for corporate policies and procedures.
- Issuing consideration confirmation notices to requesters.
- Issuing accepted requests to the Team for research and development.
- Reviewing position papers and proposals for corporate policy and procedures prepared by the Team.
- Approving or rejecting position papers and proposals for corporate policies and procedures.
- Reissuing rejected proposals to the Team for modifications; or notifying the requester of rejection.
- Establishing direction and priorities for policy development or revision.
The Steering Team should be comprised of representatives from Corporate, Administration, Human Resources, Production, Financial Control, Information Services, Data Processing, Facilities Management, Sales, Project Management, Construction, Acquisitions, Marketing, and other key areas as deemed appropriate. We recommend that the chairman of the Steering Team have following qualifications:
- Familiarity with existing policies and procedures.
- Familiarity with management's plans and goals.
- Available time to meet the demands the Steering Team's work imposes.
We recommend that the Steering Team meet on a prescribed day each month. Steering Team discussions should be limited, generally, to agenda items prepared by the Team or new policy and procedures requests. The agenda items prepared by the Team should include the status and forecast for completion of every open request.
The duties of the Team will be to:
- Acknowledge receipt of requests from the Steering Team.
- Compare requests to existing Company policy to determine existing coverage or violations of existing coverage.
- Prepare a position paper recommending the appropriate course of action to follow.
- Prepare a draft of the corporate policy or procedure; or a position paper as to why further pursuit of the policy should not be completed.
- Circulate a draft of the proposed policy (or rejection position paper) to Steering Team members prior to Steering Team meeting.
- Prepare the agenda for the Steering Team meeting which should include a discussion of all draft proposals or rejection position papers; and a status and forecast for completion of all open requests.
- Develop final copy of approved and authorized policies.
- Distribute copies of new policies to all applicable manual holders.
- Communicate to employees the adoption of new or revised corporate policies.
The Team should be comprised of individuals familiar with the organization, its goals and objectives, and existing corporate policy and procedure.
Sample Paragraph:
We recommend that this Team be staffed, to the extent possible, by individuals from the Planning and Budgeting function. This function in a company, generally, is familiar with all activities as a result of the planning and budgeting process. This familiarity should directly affect the efficiency and effectiveness of the Team.
During the initial project, the Team members should be dedicated full-time to the research and development of corporate policies and procedures. Subsequently, the Team will perform the research and development activities on an "as-required" basis. We believe that these ongoing activities should be integrated into the responsibilities of the Planning and Budgeting function.
7. Maintenance
Maintenance of the corporate policies and procedures should be the primary responsibility of the individuals indicated on each policy as procedure coordinator. These individuals are directly or indirectly involved with the policy or procedure on a day-to day basis. Therefore, they should be aware of any changes to policy, practice or procedures. On a regular basis, preferably bi-annually, the Policy Steering Team through the efforts of the Policy and Procedures Team should circulate to every procedure coordinator a listing of every policy and procedure for which that person is responsible. These people should review the policies and represent to the Steering Team any modifications required. This listing should be on a specially designed form, word processor or document file, which provides space for the individual to indicate that he has reviewed the policy, that either changes have occurred, or that no changes have occurred. This can be accomplished by the use of boxes to be checked as appropriate. This review listing should be returned to the Steering Team to serve as documentation that policies and procedures are current. If a review list should be returned indicating a change has occurred, the Subcommittee should perform the necessary research and development steps to effect the revisions.
Although the primary responsibility for determining maintenance needs is charged to the procedure coordinator, other company personnel may observe situations where change is required. We recommend that management encourage company personnel to report such observations to the procedure coordinator as well as to the Steering Team. Standard forms for manual users to submit changes should be included in each manual distributed.
Regardless of the methods used to identify maintenance needs the Team should execute revision requests in the same manner as requests for new policy. The Internal Audit function should test for the compliance with the corporate policies and procedures on a regular basis.
8. Compliance
As with any written documentation, policies and procedures are only as good as they are kept current and properly used to perform the activities of the company. Substantial effort will be required to maintain accurate, complete, and up to date documentation.
In addition, management must endorse in their actions the very corporate policies and procedures they choose to adopt. All management levels must work together in compliance with the polices and procedures of the company. No one is immune to these standards.
Failure to recognize the importance of compliance at the top as well as in the middle and lower ranks of the organization will doom the project to a mere historical rendition of how things were or might have been. Our recommendation is to involve all levels of management in the development and maintenance of the company's policies and procedures, if not in actual writing, then in signature and active endorsement.
Compliance will also come from the internal audit and independent financial and regulatory audit activities directed toward the company. It is important to address the issues raised by these groups to ensure an effective and workable system is in place and that steps are taken to timely correct any deficiencies discovered.
We will release policy and procedures using a piecemeal approach, which is the process of breaking the project into logical pieces. We can then build individual procedure sets and release them as they are completed.
Each release will have a transmittal letter. This letter will communicate happenings and changes as well as list benefits and provide reasons for the changes. Also included in the transmittal letter will be a filing instruction memo. This memo will list all changes, additions and deletions and will instruct the recipient on how to file the new and old material. Transmittal letters should be filed at the back of each manual and filing instruction memos should be filed at the back of each appropriate section of the manual. This will provide a record of updates and show accuracy of the manual. The old pages, which have been replaced, should be returned to the manual administrator to confirm the update of the material and ensure the confidentiality of sensitive material.
The manual administrator will maintain a distribution log of recipients, including date released and the date on which the old pages were returned. This confirms that the update was filed properly and in a timely manner.
See below for an example of both a transmittal letter and a filing instruction memo.
Sample Transmittal Letter:
 | |
| MEMO TO: | All Department Heads |
| FROM: | [Manual Administrator] |
| DATE: | April 20 2024 |
| SUBJECT: | NEW MANUAL REVISIONS |
| |
| Attached are filing instructions memos for several sections of your Accounting Policy & Procedures Manual. Please make all revisions and return the old pages to my office. | |
| These changes are being made to add consistency to our manual and to increase accountability in several areas. If you have any questions, please contact me. | |
Sample Filing Instruction Memo:
| | |
| MEMO TO: | All Department Heads | |
| FROM: | [Manual Administrator] | |
| DATE: | April 20 2024 | |
| SUBJECT: | ACCOUNTS PAYABLE | |
| ||
| Remove old page(s) | Replace with page(s) | Explanation |
| AP-1000 | AP-1000 | Language change |
| AP-1100 (pages 1-4) | AP-1100 (pages 1-4) | Addition of procedure step |
| Return old pages to the Manual Administrator by _______________ | ||
| Name _______________ | ||
| Date _______________ | ||
Format, Layout and Style
Format/Layout/Style represent critical design factors for corporate policies and procedures. Proper use of these elements should make the policies and procedures more efficient and effective tools.
The objective of this section is to provide a framework for developing effective corporate policy and procedure manuals using format, layout and style. By properly developing these three critical design elements, the manuals should be an efficient tool, assuring the reader of speedy, convenient, and accurate retrieval of desired information. In addition, the effort used to develop, issue and maintain the manuals should be minimized.
The remainder of the section addresses each of the design factors:
- Format - Controls the housekeeping and information retrieval elements of the manuals;
- Layout - Controls the physical arrangement of the information items on the document page; and
- Style - Controls the syntactical pattern of the sentence structure used in the manual contents.
9. Format
- Arrangement of fixed information on formatted pages.
The first of the design factors is format, which controls the housekeeping and information retrieval elements of the manual. Good format includes the following items:
- Binders
- Tabbed dividers
- Table of contents
- Indexes
- Document numbering system
- Arrangement of fixed information on formatted pages
On-line Access
We will locate the work product on our central file server to provide quick, inexpensive access to all employees on a need-to-know basis. We will use a system of password authorization to control access and updates.
Binders
For situations requiring hard copy documentation, we will use loose-leaf locking ring type binders. These binders facilitate adding or deleting policies and procedures.
In addition, they can be made attractive much like the Accounting Manual now used by employees to house the [Your Software] chart of accounts. Distinctive manuals will emphasize management's intent and desire for the company's employees to read and follow the policies and procedures.
Tabbed Dividers
We will use tabbed dividers to separate the various sections of each manual. The dividers should identify the section name. These dividers should be made of heavy and durable material. Dividers that have laminated plastic or a similar process would be the most desirable. On-line manuals will use folders to separate various sections of each manual. The folder name will identify the section name.
Table of Contents
We recommend that a table of contents precede the body of each manual. The table should include all policies and procedures within that manual. The on-line manuals should provide hypertext access to specific policy and procedure sets or topics.
Indexes
A topical index is intended to cover policies and procedures in all corporate manuals. We recommend that the topical index be included in all manuals to facilitate a speedy reference to other manuals.
Document Numbering System
The indexing technique or document numbering system is a key factor in formatting the corporate manuals. The system has to be flexible enough to handle new policies and procedures as they are developed as well as revisions to existing policies and procedures.
We will control the content of the manuals using a six-character alpha-numeric system (XX-XXXX). The first two letters of the policy number indicate a major class heading, the next digit indicates a minor class heading, and the last three digits are sequentially assigned within the minor class heading.
An example of a corporate policy number is shown below. This particular policy relates to standardizing and controlling the processing of vendor invoices and other payables.
- AP 1 000
- AP 1 = Department and Desk Procedures
- AP = Payment Request Processing
- A = Accounts Payable
Arrangement of fixed information
The arrangement of fixed information on formatted pages addresses such items as identifying the manual, the policy number, the subject and other items. To accomplish these objectives, we will use a template page similar to what is being used for this Executive Summary document.
Using this template should provide the user with consistent placement of fixed information which generally means speedier, more convenient access to information.
Page format explanations and definitions related to the template appear below:
- Manual name - Name of the appropriate manual
- Subject - Title of the policy statement
- Major class - Major class heading within a corporate manual
- Number - Complete policy number
- Complete revision - A complete revision is indicated when a major change in the policy is made
- Partial revision - A partial revision is indicated when policy, practice, procedure wording had changed but there is no major change in policy
- New - A new policy is indicated where the subject material has not previously been documented
- Supersedes - Identifies the superseded policy document by its number and issue date
- Page - Identifies the number of each page within each policy
- Issue date - Date approved by the policy committee
- Effective date - Reflects the effective date which may be retroactive or prospective to the issue date
- Approved by - Signature of person authorized to approve policy; generally chairman of the policy committee or Company President
10. Layout
The second design factor is layout which controls the physical arrangement of the information items on the document page. The layout design is concerned with the disposition of information on the page and appearance.
- Disposition of information - The recommended location of the various elements, such as the policy statement, the practice statement and the procedure statements, on the policy page; and
- Design functions - The recommended functions which affect physical appearance of the document. These include the use of captions, narrative statements, play script, flowcharts, exhibits, and examples.
Disposition of Information
Each policy will contain the elements detailed below. The elements are illustrated in the exhibit on the following page.
- Purpose - A brief introduction which clearly states the purpose of the policy
- Statement of policy - A directive from top management to define the area within which a decision is to be made and to prescribe that the decision will be in line with overall plans and goals
- Statement of practice - Guidelines and methodologies for the application of policy. Practices outline, in general terms, how a policy is to be carried out
- Procedure Coordinator - Management position or functional responsibility who can provide additional information relating to the policy, or who is responsible for its implementation.
There may be situations where additional information may be required to further explain a policy. Should management believe additional qualification or information be required, any one or all of the following can be added to the policy format. Please refer to the exhibit on the following page.
- Scope - Qualification of the individuals affected by the policy statement, e.g., all new hires
- Organizational units affected - Qualification of groups, divisions, subsidiaries, corporate staff, e.g., Sales and Marketing group only
- Procedures - Directions necessary to execute the policy
Design Functions
The design functions affect the physical appearance of the document. These functions include the use of captions, narrative statements, play script, flowcharts, exhibits and examples.
For the corporate level policies and procedures we will use captions to control the appearance of data on the policy document. These would depend on the elements used, but would include the seven items shown in numbers 11-17 above. These captions should be plainly visible and underscored. The recommended format for the purpose, policy, scope and organizational units affected statements is a narrative statement. These are statements written in normal sentence and paragraph form.
The recommended format for practices and procedures is play script. As its name suggests, play script resembles the script of a play. The combination of "Responsibility" and "Action" connects the responsible individuals to the specific action that is required. The advantages of this format are significant.
- It is easy to write
- It is easy to read and understand
- It is easily segmented for use by the responsible individuals; and
- It is easily cross-referenced to exhibits, forms, examples, etc.
The "Responsibility" section can contain a name, a position, or group/region/department/etc. Calendar dates can supplement any of the above. Each statement of "Action" should contain only one action and must begin with an action word. This format forces the writer to use simple sentences in the action voice. Although play script is the recommended format for the practice statement, there may be situations when the narrative format should be used. These situations typically further qualify the policy statement. As an example, the following policy statement may be further qualified in the practice section to describe the types of expenses which will be reimbursed as well as maximum dollar limits.
"The Company will reimburse employees for all reasonable expenses of relocating when asked to relocate by the Company."
Flowcharts help users who do not understand written procedures or who do not understand how a segment fits into the overall procedures. Consequently, flowcharting techniques are generally used for large, complex situations that may be found at a departmental or desk procedure level. Because of the general nature of corporate policies and procedures we do not recommend the use of flowcharts. However, we do recommend their use at levels below corporate.
The following exhibit is presented to illustrate the format/layout/style techniques discussed.
EXHIBIT
Purpose:
The Company desires standardization of the process of developing and distributing policies and procedures through management's understanding, commitment and authority to establish credibility and professionalism throughout the company.
Statement of Policy:
The Company will document its activities in a written, formal structure to give each employee a solid base from which to carry out the goals of the organization.
Practice:
| |
| Responsibility | Action |
| |
| President/CEO | 1. Oversee and support all efforts to establish workable policies and procedures without interfering in the creative process. |
| Task Force | 2. Develop the plan of actionto direct the development and maintenance effort. |
| Procedure Teams | 3. Gather information about processes of the company. |
| 4. Develop better ways of doing things. | |
| 5. Test new ideas. | |
| 6. Obtain management approvals. | |
| 7. Implement changes. | |
| Task Force | 8. Document processes with policies and procedures in the voice of the users of the policies and procedures. |
| 9. Train others in the new processes. | |
| 10. Support people affected by change. | |
| 11. Provide system of feedback. | |
| 12. Perform regular updates of the documentation. | |
| President | 13. Give recognition to team members demonstrating exceptional performance. |
System Requirements: Personal computer, MS-Windows based platform, MS-Office 95 and higher or any compatible word processing software, 4mb of storage space, CD-ROM Reader.
11. Style
Style controls the syntactical pattern of the sentence but also includes other important elements such as word choices, tone and emphasis. We will use declarative sentences for policy and certain practice statements, imperative sentences for certain practice and procedure statements, and indicative sentences for certain practice statements.
In addition we will use the following general style techniques:
- Use the active voice. For example, say "They wrote the procedures," not "The procedures were written by them." The active voice is more concise and maintains the flow from action to action. Changing from active voice to passive voice and back again interrupts the idea flow and tends to impair the ability of the writer to communicate with the reader.
- Keep sentences short, but not so short that the effect will be choppy. Use the general rule of "One sentence should contain one idea." Sentence structure should be direct as possible. Compound sentences present two or more related but independent thoughts that may be connected by "and", "or" or "but." Complex sentences present two or more thoughts of unequal importance, one of which is dependent on the other. Whenever possible, reduce compound sentences to simple sentences. Complex sentences, in some cases, can be replaced by simple sentences that explain the dependence of one thought on the other.
- Avoid complex terms, just as you avoid complex sentence structure. Choose words that have a clear meaning.
- Define all acronyms and terms. If technical or unfair words or acronyms are used, explain clearly. Use definitions and examples to explain these words and acronyms. Consider placing these words and acronyms in a glossary of terms. Drop all unneeded words which will clutter the policy or procedure. Careful choice of words will shorten and clarify the policy or procedure and will avoid confusion in the future.
The choices made by the procedure writer determine whether the procedure will be a useful tool or something to be avoided. The policies and procedures will be used by many people, each with his/her own background, level of knowledge of the subject, and needs. The key element in writing good policies and procedures is to keep it simple.
Three styles of sentence structure which should be used are shown below:
| Situation | Style | Description |
| ||
| Policy or Practice | Declarative | A sentence with subject + verb + complements. |
| Practice or Procedures | Imperative | A sentence with verb first. |
| Practice | Indicative | A sentence with verb first but written in the third person; generally used to advise someone else other than the doer. |
12. Resources
- Books
- How to Write Effective Policies and Procedures by Nancy Campbell, available at www.natsem.com
- Software
- POLYPROC™
- Seminars
- Developing and Implementing Effective Accounting Policies and Procedures, available at www.natsem.com
- How to Establish Effective Internal Controls, available at www.FredPryorSeminars.com