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POLICY & PROCEDURE MANUALS -
TOOLS FOR GREATER
PRODUCTIVITY AND EFFICIENCY


by Linda Carter
© The Retail Management Advisors, Inc.
email:

*To print this article, please click here

In today's tough retail environment the retailer needs all the tools he can get to help improve efficiency, productivity, and the bottom line.  Two of these tools are the company's Policy Manual and Procedure Manual. 

In working with independent retailers throughout the country we have found that the majority do not have written policies and procedures.  When questions or problems arise concerning the store's policies or procedures the store owner/manager handles them on an individual basis.  The problem with this approach is that it takes too much of management's time and can lead to inconsistency in dealing with company policy and procedures. 

Employees respond well to an environment in which company policies are well defined and equitably and consistently enforced.  Therefore, having a written Policy Manual and Procedure Manual can make a store a better employer and a stronger profit maker. The Policy Manual will give the employees the information they need concerning company regulations and policies and will support management in enforcing them.  A Procedure Manual will give the employees instructions on HOW to do their job.  It can be used both as a training manual and an on-going reference manual.  If your store does not have both a Policy Manual and a Procedure Manual, make a commitment to begin this important project immediately.  If you do have these manuals, take some time to review them and verify that they are up-to-date and include all the information your employees need to be more productive and efficient.

POLICY MANUAL
There is much information concerning the company that employees need to know and management is obligated to tell them.   The best method for disseminating this information is by providing it to the employees in the form of a written Policy Manual.

A written store policy manual is also an important management tool.  It details for your employees what you expect of them.  Personnel problems are avoided because ideas of conduct, job performance and general store policy are spelled out in writing.  The excuse "You didn't tell me" can not be used when employee problems arise.

A Policy Manual is needed for companies of all sizes.  The manual should be expanded to cover any new situations that arise.  A growing company especially needs a continuously updated policy manual to keep its employees fully informed of all the changes occurring in company philosophy as well as policy.

In writing the Policy Manual, keep in mind that it will be used by supervisors to resolve any disputes or initiate disciplinary action, and should, therefore, be written in such a way that it supports them in this endeavor.

A Policy Manual should answer some of the most important questions employees ask.  For example, prohibitions against drinking and drug use on the job, performance review, holidays, vacations, benefits, leave of absence, work hours, personal hygiene grooming as well as dress codes and other critical policies that often affect morale.  However, don't put anything down as policy if you are not going to enforce it as this just confuses employees and creates dissention.  Also, a Policy Manual may be considered legally binding so it would be best to consult with your lawyer regarding local, state and federal statutes before you issue the Policy Manual to employees.

The company Policy Manual is usually divided into sections covering the following areas:

1. Introduction to the Company
2. Orientation
3. Working Conditions
4. Wages
5. Benefits
6. Evaluations
7. Employee's Termination
8. Store Services

The introduction gives a brief history of the store and welcomes the new employee.

The orientation section includes general information on what is expected of the employee, job descriptions, personal appearance and grooming guidelines, and how he is expected to handle the customer.

The section on working conditions includes such things as store hours, employee scheduling, overtime policies, breaks, personal use of the telephone and causes for termination.

The wages section includes a statement or two about the wage and hour laws, payroll record keeping requirements, when employees are paid and how pay is computed.

The employee benefits section covers such items as holidays, vacations, sick leave, jury duty, employee discounts, insurance and pension plans.

The section on employee evaluation details what the evaluation will be based on, shows the printed forms used in the evaluation process and gives a schedule of when evaluations are made.

The section on employee termination tells the amount of advance notice required and outlines the options available regarding the employee's insurance, pension plan and settlement of his charge account.

The last section, store services, gives a general overview of the services provided for customers such as charge accounts, layaways, gift certificates, alterations and delivery.

The Policy Manual is a good vehicle for a company to use to indoctrinate new employees and to keep all employees informed as to any changes in company policy and philosophy.  It should tell employees all they NEED to know as well as what the company WANTS them to know.  To be used effectively, the company's Policy Manual must be continuously updated, must be enforced at all times and must ALWAYS be supported by top management.

PROCEDURE MANUAL
For a retailer to survive and prosper in today's retail climate, he must be alert to any and every possible way to streamline his operation.   The development of a Procedure Manual forces the retailer to take an in-depth look at the total operation and can, therefore, be very enlightening.   It can help the retailer to identify:

* Recurring problem areas
* Areas where internal controls are weak or non-existent
* Where work is being duplicated
* Where unnecessary work is being done - so busy work can be eliminated
* How the organization can be improved so all areas of the business work together efficiently and economically toward the common goal of store profitability

A Procedure Manual provides detailed instructions for all the company's standard work routines. The manual should be written in an easy-to-read, detailed, step-by-step manner so all employees will be able to use it for guidance in handling new or unfamiliar transactions or procedures.  The benefits of a Procedure Manual are many.  For example:

* People know what to do and what is expected of them
* The company is no longer tied to an "indispensable" employee
* Minimizes dislocation and loss of time and energy due to personnel turnover
* Helps new employees quickly learn and achieve a productive status
* Reduces management time spent in training
* Facilitates growth of your business
* Can free the retailer from an in-depth involvement in all the details of daily operations
*  Standardizes the way identical tasks are performed by different employees, thereby increasing efficiency and reducing errors

The Procedure Manual must be as detailed as possible so it can be used as a training manual for new employees as well as a resource manual for existing employees.  A set of standard procedures should be developed for every activity in the store from alterations to store maintenance.  All of these areas of activity can contribute to or detract from your store, either directly or indirectly.  Some activities need step-by-step instructions.  Examples of these would be activities involving record keeping and merchandise handling.  Other activities by their nature will need only general guidelines within which to operate.  One of these areas might be housekeeping, with guidelines for carpet care, lighting, window washing and pest extermination.  As an example of the level of detail needed for the Receiving/Checking/Marking department we have listed below a portion of the table of contents of a Procedure Manual we helped a client develop:

I.    Purchase Orders
         A.  General Discussion
         B.  Purchase Order Maintenance
         C.  Use of the Purchase Order in Receiving
         D.  Filing Partially Complete, Completed and Canceled Purchase Orders

II.   Receiving
         A.  General Procedures
         B.  Source Documents & instructions for completion
         C.  Receiving Merchandise
         D.  Checking and Marking
         E.  Supervisor's Responsibilities

III.  Refused Shipments
         A.  General Discussion
         B.  Source documents & instructions for completion
         C.  Checking for and Refusing Delivery of Late Merchandise
         D.  Retention period for Purchase Order Cancellation and Change Reports

IV.  Returns-To-Vendor and Claims
         A.  General Discussion
         B.  Source documents & instructions for completion
         C.  Processing a Charge Back
         D.  Shipping return merchandise to the vendor
         E.  Supervisor's Responsibilities

The Procedure Manual should be developed around the logical divisions of your business, such as receiving and marking, office, store and buying.  Then each division will be further divided into specific job responsibilities.  

The section on receiving and marking should detail the standard routines for handling purchase orders, receiving, checking and marking merchandise and returning merchandise to vendors. 

The office procedures section should explain the routines for such areas as sales audit, accounts payable, accounts receivable, inventory control, payroll and data entry. 

The store section would explain the forms and procedures used in handling the different types of sales such as cash, layaway, gift certificates or charge.  It should also detail how to handle returns of merchandise, due bills, interstore transfers, the receipt of new merchandise on the sales floor, price changes,  how to take a physical inventory count, and opening and closing procedures. 

The buyers section would cover the items for which the buyer is responsible, namely purchase orders and price changes.

A well planned and maintained procedure manual will greatly facilitate the growth of your business.  It is your foundation on which to build.  New stores can adopt the tried and proven procedures used by the original store and begin operating smoothly and efficiently from the very beginning.

IN CONCLUSION, it is the retailer's responsibility to provide employees the tools they need to do their job in an efficient and productive manner; a Policy Manual letting them know what the company expects of them and what they can expect of the company and a Procedure Manual giving them instructions on how to do their work correctly.

Once the Policy Manual and Procedure Manual have been written and are in place, they will free up the owner/manager's time so they can more effectively use their time to help the company become more profitable.

Most retailers or their staff, not being authors or as attentive to details as necessary, or even lacking the time, will find it helpful or necessary to get professional help from a consultant knowledgeable about retail industry practices.  It would be a wise investment, to be returned many times over.

© The Retail Management Advisors, Inc., All Rights Reserved
510 Red Oak, Allen, TX 75002
Phone: 877-206-1299
email:  

*To print this article, please click here

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