When Not to Set Policy

Policy is critical. Yet, there is a balance between too much and too little, and it’s essential that you understand this balance when you develop and implement policy.

In my last post, I covered when it is important to set policy. I wrote that the rule of thumb for more policy is when one of the following criteria apply:

• The cost of a mistake in judgment is too high.
• Common sense judgment has not or would not get the results or behavior that is important to you.
• There is a record of somewhat consistent poor results across a number of departments or employees, i.e. not an isolated section or employee having difficulty.

But how do you know when NOT to set policy? Well, for starters, the converse of what is listed above qualifies as a time not to set policy.

However, there is one common practice in policy setting that, in my experience, is most damaging and also well hidden. Namely, using policy to replace supervision, i.e., the evaluation and management of performance of employees. Commonly, supervisors don’t like confronting employees regarding their performance. An example? An individual employee’s misuse of a company vehicle. Rather than deal with the individual, the supervisor will mandate that all employees park their vehicles at the end of the day. All employees are negatively impacted because of the behavior of a single employee that the supervisor won’t confront.

Why is this done? Because supervisors believe they need a rule in place to enable them to be successful with a “gotcha”, and only a “gotcha” can get either the behavior you want or provide grounds for termination.

Another example might be a policy in a chain of retail stores mandating that regional managers visit each store once every three months. This policy is in place because management doesn’t believe or trust that regional managers have good judgment about when to visit stores or that they will slack off on their visits to stores. But the impact of such a policy may well be that high performance stores are visited needlessly and underperforming stores aren’t getting the training/support they need to get to high performance.

An alternative to the mandated visit, the retail chain could state that the regional managers shall have the authority to make the judgment on when and how often stores should be visited but will be evaluated based on the performance of the stores, providing an incentive for good judgment.

There is no list of hard and fast rules on when to set policy and when not to. But the above guidelines are a good place to analyze the policy you have in place. Strong leadership requires sound judgment and discernment on what is best for your unique organization.

Have a specific policy question? I would love to hear from you. E-mail us with your comments.