Policy Development for PCU La Union Affiliates

Policy Development

What is a policy?

Importance of policies

The role of policies

Policy goals

Policy formulation and processes

Policy content

Policy constraints

Who makes policy?

Causes of bad policy

Communicating Policy

Topic Outline

Objective To be able to formulate

effective and acceptable policies for implementation

Effective Formulation means that the

policy proposed is regarded as a valid,

efficient, and implementable solution

to the issue at hand

Acceptable Formulation means that

the proposed course of action is likely

to be authorized by the legitimate

decision makers, usually through

majority-building in a bargaining

process

Many people think of organization policies in a negative light which is a means to control employee behavior. However, there is a more positive side to policies. They can actually empower employees. It is true that many policies seem restrictive in nature and many need to be to promote good internal control however, policies also provide staff with a degree of freedom within defined boundaries. With good policies in place, staff is able to execute their duties and are free to act within the limits set by policy without constant managerial oversight. In that way, policies empower staff to do the right thing.

What is a policy?

POLICY is to guide the actions of all

persons involved or connected with the cooperative in regard to any area of activity in which the cooperative has

jurisdiction. Policies are guidelines for

directors, committee members, employees and members

What is a policy?

The existence of practical and comprehensive policies tends to increase efficiency

Decisions made within a policy framework have a higher probability of being synchronized with other decisions within the cooperative

What is a policy?

A policy is a predetermined course of action established as a guide toward accepted objectives.

A policy is a statement, verbal, written or implied, of those principles and rules that are set by Board of Directors as guidelines on organizations actions

Importance of Policies

In some cases policies must be observed

(mandatory) while in other cases

policies serve as only as guidelines

(advisory) for the ethical, strategic,

operational.

The Role of Policies

• Provide specific guidance toward implementing strategies to achieve the cooperative’s vision

• Provide general guidance about the cooperative’s mission

• Provide a mechanism to control the behavior of the cooperative

• Enable the management to relate properly to the organization’s work and its objectives

Vision

Statement

“what we

want to

become”

Mission

Statement

“who we are

What we

value”

Goals &

objectives

“How we measure

our degree of

success

Strategy

“how we will

achieve our

vision”

Policies &

Procedures

Communicating Purpose to Stakeholders

Policy Goals

A policy is not formulated unless it is thought to be necessary or to have a benefit. In other words the policy exists for a purpose and this may be often expressed in the form of an "underpinning principle".

Policy Underpinning Principles

1. Gender Equality Policy

Equality and coexistence of men

and women

2. Quality Customer Service Policy

Increase satisfaction of

members/customers and

encourage membership renewal

3. Social Responsibility Policy

Concern for the Community

Policy Legal Basis 1. Policy on Savings Mobilization and Capital Build Up

"ART. 6. Purposes of Cooperatives. A cooperative may be organized and registered for any or all of the following purposes "(1) To encourage thrift and savings mobilization among the members; "(2) To generate funds and extend credit to the members for productive and provident purposes

2. Loan Policy "ART. 7. Objectives and Goals of a Cooperative. The primary objective of every cooperative is to help improve the quality of life of its members. Towards this end, the cooperative shall aim to: "(a) Provide goods and services to its members to enable them to attain increased income, savings, investments, productivity, and purchasing power, and promote among themselves equitable distribution of net surplus through maximum utilization of economies of scale, cost-sharing and risk-sharing; "(b) Provide optimum social and economic benefits to its members;

Policy Legal Basis 3. Policy on Social Responsibility

This is in full compliance of Section 2 Rule 8 of the Implementing Rules and Regulations (IRR) of RA 9520, otherwise known as the Philippine Cooperative Code of 2008. Social audit is a procedure to assess the cooperative social impact and ethical performance vis-à-vis stated mission, vision, goals and code of social responsibility. This will serve as a control mechanism to account for the social performance and evaluate the coop’s impact in the community taking into account the community development fund.

4. Ethics and Conduct Policy

Section 10 Function and Responsibilities of the Ethics Committee, By-Laws Recommend ethical rules and policy to the BOD;

Policy Formulation and Processes

Crafting a mission

and vision is not

easy, it helps to

follow the right

steps.

Vision Mission Objectives, Policies and Policies/Procedures

Policies /Procedure

Strategic Objectives

Mission

Vision

Both statements should be meaningful to all in the organization.

It should be shared to all members to create a unified direction for everyone

Vision A vision statement is a future-oriented declaration of the organization’s purpose and aspirations

“ We envision ourselves to be the

best, efficient and productive

cooperative, dedicated and

committed in bringing prosperity

and positive transformation to its

members and the community”.

Vision Statement

VISION The best economic and social cooperative center in

Luzon

MISSION To pursue sustainability by providing quality and affordable

financial products and services responsive to members needs

in a gender fair environment.

To deliver complementary solutions in enriching the lives of

members and communities.

To ensure employees satisfaction for professional growth and

advancement.

To promote good environmental stewardship through

innovative programs, projects and socially responsive

services

VISION

VISION

A Globally Competitive and Gender Fair Credit

Cooperative

MISSION

The TUBAO CREDIT COOPERATIVE, a prospering and

growing institution uplifting the socio-economic

conditions of the members through its various gender

responsive financial products and services.

From a well written mission statement objectives can be set and from objectives, policies can be created. Just as a mission or vision for your organization is a prerequisite to policy development, so too are strategic objectives. Objectives are like goals. They direct the staff’s attention to important factors in running the organization and help define unique ways to enhance performance of individuals and the organization as a whole.

STRATEGIC MANAGEMENT MODEL

ENVIRONMENTAL

ANALYSIS

EXTERNAL

•THREATS

•OPPORTUNITIES

INTERNAL

•STRENGTHS

•WEAKNESSES

MISSION

OBJECTIVES

STRATEGIES

PROGRAMS

PROJECTS

PROCEDURES

BUDGETS

STRATEGY FORMULATION

STRATEGY IMPLEMENTATION

F E E D B A C K

VISION

PERFORMANCE

Steps in Policy Development

Research and consultation are key step in the process. A sound policy is built upon good consultation with those who will be affected by the policy.

Steps in Policy

Development

The cooperative also needs to know and understand the

purpose of policies and to recognize that the issue or

problem can be effectively dealt with by the creation or

modification of a policy.

Typically, public policy making

starts with perception of a

problem. Getting the diagnosis

right is the key!

Identify and define the

problem or issue that

necessitates the

development of a policy

1. Issue Identification and

Definition

Workshop 1 Identify and define the problem or issue

that necessitates the development of a policy

There are many factors which influence policy choices

including timeliness of response, responsiveness to

member needs, cost of implementation and projected

impact on the desired outcome supported by reliable and

timely evidence

Systematic collection and

presentation of information is the

backbone of policy development.

Thorough research and data

analysis provides the body of

evidences necessary to justify

decision making

2. Policy Research and Analysis

3. Generating Policy Solutions and Alternatives

The worthiness of a list of

policy alternatives, and the

recommended policy option,

must reflect the thoroughness

and rigor which is applied to

the definition and analysis of

the issue, the degree and types

of consultation undertaken and

pre-considerations of the

measurability of the policy once

its been implemented.

Furthermore, the potential

viability of policy alternatives is

not only about integrity of

process, it is also dependent on

the degree to which political

realities, the

public's/stakeholder's tolerance

of risk, and policy response

times are considered.

4. Consultation Agenda

Setting

Policy

Formulatio

n

Policy

Adoption

Policy

Implementatio

n

Policy

Evaluation

The Policy Making

Process

revision

Consultation helps to

build trust and

transparency and good

working relationships

which are necessary for

successful policy

implementation.

Consultations are carried out :

Within the lead Agency with their technical experts

Within Other Government Agencies which may be directly or

indirectly impacted

With Among committees, management and stakeholders

The proposal often consists of a written paper outlining the basis for the policy and the facts supporting various policy options. It articulates the consultation process followed and the potential impacts of the policy alternatives on the members and various stakeholder groups

While policy proposals generally list more than one alternative to address the issue; the paper should clearly articulate the preferred or recommended option considering the balance of the evidence gathered.

5. Developing Policy Proposal

• Policies are proposed and thoroughly discussed in the board meeting.

• Policies formulated and agreed on are consistent with the vision, mission and goals of the cooperative.

• Policies agreed on are in accordance with existing laws and regulations

The final policy document needs to be formally adopted by the member of the Board of Directors with an appropriate record entered in to the minutes

Following formal adoption of the policy it should be communicated far and wide throughout the cooperative and stakeholders. Training sessions may need to be conducted to ensure that personnel are fully informed and able to implement the policy. If the policy is not well communicated it may fail.

Communication

6. Policy Implementation Policy

Implementation is the

stage in the policy

process where policy

action occurs to address

a recognized policy

problem. At this stage,

the design of a policy

proposal is put into effect

and the policy is

executed by respective

administrative agencies.

6. Policy Implementation

According to Theodoulou and Kofinis (2004), how well

policy is implemented is affected by the three criteria:

1. Clarity. A goal stated with clarity and specificity not only provides direction but also improves the basis by which policies can be evaluated, for accountability, efficiency, and effectiveness.

2. Constant feedback as to how implementation is

progressing, as well as preliminary assessments of impacts

3. Strategic Planning. Essentially, strategic planning is a

tool with which the agency can evaluate its ability to achieve

the goals of the policy, as well as plan for how the policy will

be executed

Policies are typically promulgated through official written documents. Policy documents often come with the endorsement or signature of the executive powers within an organization to legitimize the policy and demonstrate that it is considered in force. Such documents often have standard formats that are particular to the organization issuing the policy. While such formats differ in form, policy documents usually contain certain standard components.

7. Policy Monitoring

and Evaluation

Evaluation considerations must

begin early in the policy

development process as objectives

are formulated and indicators are

established in order to determine

policy effectiveness.

Evaluation is not simply about

assessing whether an initiative was

a success or failure. Instead,

evaluation is about creating the

information and data about the

initiative's success and why.

Evaluation findings can lead to

more effective and efficient

program delivery

The implementation of the policy should be monitored. The policy may still require further adjustments and furthermore the reasons for the policies existence may change. A general practice is to set a date for the policy to be reviewed, this might be one a year or once in every three years. It just depends on the nature of the policy.

Evaluation is simply one component of the policy cycle and an overall performance management framework. As an initiative is implemented, the outputs and outcomes are monitored, refined and then evaluated. Findings from the evaluation results will allow for adjusting and modifying the various outputs and outcomes of an initiative and the process gets repeated. This process is shown in the Evidence Wheel, a diagram that is part of a curriculum given by British Columbia’s Knowledge and Information Services Branch.

Evaluation as Part of a Larger Process

http://policynl.ca/policydevelopment/pages/evaluation-larger-process.html

Evidence Wheel

• Policies are reviewed and changes or updates properly discussed and documented.

• Implementation of policies is regularly monitored.

Policy Content

1. Subject of Title 2. Policy Statement 3. Purpose 4. Scope 5. Responsibility 6. Effectivity

Optional: 1. Background 2. Definition of Terms

Policy statements indicating the specific regulations, requirements, or modifications to organizational behavior that the policy is creating. Policy statements are extremely diverse depending on the organization and intent, and may take almost any form.

• A purpose statement, outlining why the organization is issuing the policy, and what its desired effect or outcome of the policy should be.

• An applicability and scope statement, describing who the policy affects and which actions are impacted by the policy. The applicability and scope may expressly exclude certain people, organizations, or actions from the policy requirements. Applicability and scope is used to focus the policy on only the desired targets, and avoid unintended consequences where possible.

• A responsibility section, indicating which

parties and organizations are responsible for carrying out individual policy statements. Many policies may require the establishment of some ongoing function or action. For example, a purchasing policy might specify that a purchasing office be created to process purchase requests, and that this office would be responsible for ongoing actions. Responsibilities often include identification of any relevant oversight relevant and/or governance structures.

An effective

date which indicates

when the policy comes

into force. Retroactive

policies are rare, but can

be found.

Some policies may contain additional sections including:

• Background, indicating any reasons, history, and intent that led to the creation of the policy, which may be listed as motivating factors. This information is often quite valuable when policies must be evaluated or used in ambiguous situations, just as the intent of a law can be useful to a court when deciding a case that involves that law.

• Definitions, providing clear and unambiguous definitions for terms and concepts found in the policy document

Be specific – mean what you say and say

what you mean.

- if action is mandatory, use “must” or “will”

- if recommendatory, use “should”

- if permissive, use “may”

- avoid “shall” – confuses between

mandatory or recommended

Writing Good Policies

Source: Sumajit (2013)

o thoroughly discussed in the board meeting

o always consistent with the vision, mission

and goals of the cooperative

o always accordance with the existing laws

and regulations

o reviewed and that changes or updates must

be properly discussed and documented

o implemented and regularly monitored

Reminders policies must be

Source: Sumajjt (2013)

Policy No. Subject Resolution No

Date Approved /Adopted

01-s-01 2013

Membership Policy

01-s-01- 2013 Jan 7, 2013

02-s-02 2013

Lending Policies & Guideline

02-s-02-2013 January 15,2013

Documenting/Codifying Policies

PERFORMANCE AUDIT REPORT

1. Duties and responsibilities of the Board well defined and segregated and duly approved

Board Resolution

- Special Order - Appointment paper

2. Officers performing their duties and responsibilities at all levels (peers, self evaluation and other form of evaluation formulated and implemented

Board Resolution

3. Oversight functions of the Board

Board Resolution

Board Policy

Adherence to laws, rules and regulations

4. Polices are reviewed regularly Board Resolution

5. Adherence to laws, rules and regulations,

Board Policy

6. Duties and responsibilities of the management well defined and segregated and duly approved

Board Resolution

7. Human Resource Policy (recruitment, selection, hiring, promotion, salary scaling program, recognition, incentives, and benefit packages of employees disciplinary action, termination and retirement

Board Resolution

Board Policy

Adherence to laws, rules and regulations

4. Incentives, and benefit packages of employees (Insurance protection program, awards and recognition, scholarship, social, cultural, sports, team and staff development)

Board Resolution

Board Policy

5. Polices are reviewed regularly

Board Resolution

Board Policy

Adherence to laws, rules and regulations

SOCIAL AUDIT REPORT

1. Feedback mechanism (feedbacks and suggestions of Members ( membership meetings, area consultation, suggestion and grievance box, telephone logbook, email, internet, social network, correspondence, mail, SMS, Freedom Board)

Board Policy

2. Responsiveness to gender, elderly, youth, and person with special needs

Board Resolution

Board Policy

3. Collaboration of programs/projects with any of the ff: NGO, PVOs, CDCs, LGUs, GOS, Business Organization and individual)

Board Resolution

Board Policy

Adherence to laws, rules and regulations

Adherence to Policies formulated in accordance with laws, rules and regulations, and by-laws

Legal basis

1. Establishment of a cooperative branch MC 2011-17

2. Training requirements for cooperative officers MC 2011-27

3. Article 27 (2) of RA9520 provides that "AII elective officials of the Government shall be ineligible to become officers and directors of cooperatives:

MC 2011- 03

4 Article42. Officers of the Cooperative (Degree of consanguinity and affinity)

MC 2011-04

5. 10 % Limitation on Share Capital MC 2011-05

6. ARTICLE 37 OF R.A. 9520 – Term of Office MC 2012-20

Adherence to Policies formulated in accordance with laws, rules and regulations, and by-laws

Legal basis

7. Implementation of training requirements for cooperative officers

MC 2012-17

8. Accountable officers MC 2012-09

9. Put up Signage in cooperative places MC 2012-05

10. Membership Registry MC 2012-16

11. Establishment of Satellite Office MC 2012-17

12. Prohibition of elective officials MC 2012-19

13. Organization of Subsidiary cooperative MC 2012–09

14. Art 46 Compensation MC 2012-17

Policies on Products and Services

Savings Mobilization

Lending

Marketing

Savings Mobilization

Lending

Trading

Marketing

Objectives

Evangelista MPC Banerle Credit Timpuyog ti

Barangay MPC

Lending

Financial Services

Programs and Services of Cooperatives

Regular Savings Deposit

Time Deposit Members Contingency Deposits Youth Saver’s Club Dream Savings Funds

Retirement Savings

Pension Savings

SAFE Savings

Build Savings Emergency Savings Fund

Savings

Share

Capital

Common Share

Preferred Share

Express Loan Regular Loan Special Loan Privilege Loan

Loan

LOAN Regular Loan Providential Loan

Commercial Loan

Financing Loan

Commercial Loan

LOAN Special Loan Salary Loan

Financing Assistance for Brgy Officials Livelihood Loan

Show Money Loan

Pension Loan

Receivable Financing Loan

Loan Against Time Deposits

Allotment Loan (OCW, Seaman)

Micro and Small Enterprise Loan

LOAN Privilege Loan

Petty Cash

Farmers Assistance

Rice Loan

Other Services Automated Teller Machine (ATM)

Health Care Assistance Program

Mortuary Assistance Program

Life Insurance

If you are charged with the responsibility to develop a policy, it will be important to consider that the policy you write will be constrained by policies, laws and regulations of federation, union, regulatory bodies, community expectations, government policy and legislation. That is why wide consultation is a key to successful policy formulation.

Policy Constraints

Coop Policy

Government

Federation

Union

Community

Hence we should not operate in a vacuum but instead a policy space. Our space overlaps the space of many other organizations with whom we must so-exist peacefully Webb, Rowland and Fasano, (1991) .

Who Makes Policy?

Organizational policy makers i.e. Board of Directors, and Management, must go about the process of policy formation in a careful way. Policy makers must engage, and be seen to engage, in the process of consultation. A charge of 'failing to consult' is a charge of considerable magnitude. While much information can be gleaned by listening to people, there is also often a need to conduct research i.e. statistical surveys, monitor events, etc.

• The role of the policy maker is act as a funnel to gather information through consultation and research and to reduce and extract from the information, a policy or a set of policies which serve to promote what is the preferred course of action.

• Seeking information from experts from outside the organization (this may include government personnel, other cooperative managers and practitioners)

Some of the skills that policy makers need to ensure the development of effective policies are:

• Collecting statistical information

• Convening and chairing discussion forums

• Be able to write policy documents in appropriate language and without ambiguity.

Causes of Bad Policy

• A failure to consult the people who will be affected by the policy or who will implement the policy

• A lack of communication between persons who are involved or should be involved in the policy formulation process

• A failure to define the problem or the essential issue(s), or an oversimplification of the issue(s)

• Policy makers are unable to reach agreement over basic facts.

• Policy makers are biased in their research for the policy formulation process.

• Policy makers take a different and conflicting position on key aspects of the policy

• Prejudice and stereotyping by policy makers

• A change of key players in the policy development process before it is completed

• A lack of understanding of the importance of policies in organization management

Communicating Policy

All organizations need to develop and communicate policies. In fact organizations are developing policies all the time but they might not know it. This is because decisions are being made all the time in regard to new situations, and often where there is no previous policy. Such decisions are made by people who have the appropriate authority and capacity such as managers, committee members, board members, the executive, etc.

When decisions are made about what actions must be taken in certain situations, it is necessary that they are:

Written down and recorded for future reference

Communicated to all persons who need to be aware of the new policy

• The process of writing down a new policy (documenting) is very necessary. If this does not occur, then there is likely to be confusion about the decision made, what was agreed and what actions should be taken.

• At the very least the policy decisions should be noted in the minutes of the meeting during which they were made. However it is very unlikely that members of the organization, or customers, will ever read the minutes of meetings.

• Therefore it is fundamentally necessary that the makers of the new policy ensure that it is put into writing and then find ways to communicate it to the anyone who needs to be aware.

Therefore it is fundamentally necessary that the makers of the new policy ensure that it is put into writing and then find ways to communicate it to the anyone who needs to be aware.

Methods for communicating policies • When a policy is put into

writing it can be communicated in a variety of ways including:

• Put on notice boards

• Sent to the membership by email or in a letter

• Put on the organization's website for download

• Displayed in a newsletter • Placed on the back side of

forms such as the membership form

• Inserted into a "member's handbook"

• Made available in a policy manual kept in the organization's office

Benefit of Policy Manuals

• It would be prudent for organizations to have a policy manual. This could be a ring binder that collects all policies together in one place.

• Once a policy manual is in existence everyone has the chance to look up the policy on a particular matter and then follow the recommended course of action.

• As a policy is amended, the policy manual must be updated.

Organizational

Policy

Business

/Operational

Policy

A. Organizational Policies

SMCBUP

Membership

Education &

Training

Internal

Control

Ethics

Human

Resource

B. Business/

Operational Policies

Lending

Trading

Marketing

Reference

• Oro Integrated Cooperative orointegratedcoop.com

• Sacred Heart Savings Cooperativehttps://www.facebook.com/sacredheartsavingscoop

• Narra Multi Purpose Cooperative

www.narracoop.org

Reference

• SACDECO www.sacddeco.com • Tubao Credit Cooperative tubaocreditcooperative.com • Gledco www.gledco.org.ph • Griffin, Michael. How to write a policy

manual at www.gobookee.org

References

• Leo Isaac. What are policies?

http://www.leoisaac.com/policy/top133.htm

• Maribeth R. Sumajit (2013) Policy Formulation at www.sliddeshare.net

• Josefina B. Bitonio (2012) What is policy?

www.slideshare.net

Workshop 2

From the issues

identified formulate

a policy for your

cooperative