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A mandatory training for cooperatives
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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