In an organization, rules are made to inform its members what they can do or what they should not do. It states acceptable behavior along with the consequences of disobedience. Rules not only ensure discipline in an organization but also help in regulating the culture and work environment.
On the other hand, policy formulation is an integral part of planning, which is intended as a guide in decision making. It recommends broad considerations that should be taken into account when making any decision. It also sets the boundaries within which decisions will be taken.
Both rules and policies are types of plans that help the smooth functioning of the organization. So, here we will discuss the difference between a rule and a policy.
Definition of Rules
Rules are a set of instructions, regulations and guidelines for standard behavior. It determines the actions to be taken or not to be taken in the organization. This is shown in the form of orders, warnings, prohibitions and norms to maintain discipline or standardize individual and group behavior.
This applies to all, i.e. rules to everyone, regardless of the level of management one is at. Example: In an educational institution, there is a rule ‘The use of cell phones is prohibited during working hours’. Now, everyone has to follow this rule, no matter whether one belongs to upper management or lower management.
Rules should be precise and clear so that employees can understand them easily, without confusion and clutter. This reduces the need for close supervision, because the rules are known to everyone, and managers can easily predict what subordinates will do in a given situation.
Rules demand compliance and anyone who does not comply with company rules will be subject to penalties or fines. Therefore, the company takes strict action against people who violate or do not comply with the rules. Moreover, there is no room for discretion when it comes to rules, so they must be strictly followed. Exceptions to this rule may exist, but only in certain circumstances, and are also limited.
Policy Definition
Policies can be defined as basic statements used to guide thinking and direct the efforts of managers towards the attainment of goals. Simply put, it is the typical response to a particular problem that determines how the organization handles the problem in different cases.
Policies are formulated for each level because decisions are made at each level of management. So the policy does its job perfectly by pre-determining frequently encountered and recurring problems in order to avoid over-analyzing the same problem and solving them without much discussion. In addition, policies provide an integrated structure or basis for managerial decision making.
Policies are fixed plans that provide immediate solutions to recurring problems. Policies act as routes or maps to achieve business goals.
Policy is a comprehensive guide, providing scope for managerial judgment and discretion. Policies exist for all departments, levels, segments and organizational units.
Furthermore, when making policies for the organization, management must invite the views of employees, because they are the ones who will deal with it. It sets boundaries and draws the line for managers’ discretion and judgment at the time of decision making.
Policies provide general directions for managers to follow so that they can handle situations appropriately at the time of decision making. However, deviations may occur in the form of exceptions as well as in the case of exceptional situations. It determines the way a manager should try to handle management responsibilities.
Policy plays an important role, as it facilitates lower level management to deal with their own problems without going to top management for every problem.
For example, Human Resources Policies relating to employee recruitment, termination of employment, performance appraisals, promotions, leave, additional benefits, etc.
Difference Between Rules and Policies
The points mentioned below provide a clear understanding of the difference between rules and policies.
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Rules are basically a list of do’s and don’ts which aims to maintain uniformity in the treatment and behavior of employees. On the other hand, Policy alludes to directives that lay a constant framework for executive action on recurring managerial issues.
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Rules can be in the form of orders, instructions or norms that need to be obeyed. Instead, policies define the framework, within which executive decisions can be taken.
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Rules define what employees should and shouldn’t do, whereas policies define what needs to be done in various circumstances.
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Policies come from business objectives, namely policies made by taking into account the goals of the organization. Instead, rules are based on policies and procedures.
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In terms of rigidity, rules are more rigid than policies, in the sense that there is no scope for thinking and decision-making in the case of a rule, but there is a certain scope for thinking and decision-making in the case of policies.
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While the rules are specific statements, i.e. specifying the actions or non-actions of employees. Instead, policies are general statements that guide managers’ decision-making in general by stating the problems they face on a daily basis and the solutions they are ready to make.
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Rules are made to regulate behavior and ensure compliance to maintain discipline within the organization. Instead, policies are formulated by management to guide decision making to ensure uniformity and consistency.
| SAMPLE RULES | SAMPLE POLICY |
|---|---|
| Every employee is required to wear formal attire in the office on all working days except on Wednesdays. | The company’s purchasing policy states that only the purchasing manager has the authority to procure materials. Furthermore, the items that can be purchased are mentioned and how much. |
| Employees are not allowed to use the internet for any other purpose (such as news, entertainment, social media, games, etc.), other than for their work. | The company’s customer service policy, to deal with complaints instantly, if they encounter problems with the product, within one month after the sale. |
| The use of office equipment, supplies and stationery for personal purposes is not allowed. | The company follows a cost-based pricing policy, for its products and services. |
| Smoking during working hours is strictly prohibited. | The company’s distribution policy determines the category or class of customers to whom the product is sold. |
Conclusion | So, what we understand is that policy is a personalized organizational approach to dealing with problems. It defines the overall framework, such as the scope and boundaries within which a manager must work. Furthermore, the basic motive behind rule-making is to ensure a disciplined environment. Therefore, rules are instructions that employees must follow as they are, i.e. without changing them.
