Standard operating procedures are specific guidelines or instructions to follow when performing a process. This process can range from operating or repairing a machine to reacting to an emergency. The existence of the SOP increases the likelihood of that procedure being accomplished correctly and efficiently.
Not only does it improve efficiency in business, but it also removes a lot of stress from the equation. Business is an extremely stressful field. If there is a way to mitigate this stress, it is more than welcome. Let’s take a look at some of the more practical benefits of an SOP and why it’s so important.
What Is the Role of Standard Operating Procedures?
The role of a standard operating procedure is to ensure that standard processes in a company run smoothly. These can be daily processes like the operation of certain machines or devices. They can also involve chain of command and approval processes for documents. There are also SOPs that involve emergency procedures like what to do in case of a malware attack or a fire breakout. These procedures take thinking out of the equation and allow people to follow a checklist. This ensures that the task is completed quickly and without hiccups.
By detailing everything out, standard operating procedures ensure that man hours, labor, raw materials, resources, and finances are saved. These are all priceless assets that ensure that the company’s practices stay efficient and veer away from wastefulness.
SOPs have five basic functions:
- Efficiency in labor and profitability
- Reliable products and services through consistency
- Error reduction in every department
- A path to solve problems among partners
- An environment that respects safety and health standards
SOPs Ensure Business Continuity
Business continuity should not hinge on a single person or entity. Having business shut down for even a few hours can mean huge losses for the company. Hence, if someone is absent due to illness, personal problems, or unforeseen circumstances, there should be a failsafe. A chain of command should be established to complete urgent tasks.
A standard operating procedure doesn’t just contain the instructions for a task though. It also contains the policies and standards that are to be enforced. It outlines the safety parameters and the efficiency guidelines that have to be adhered to. If not, the procedure can either go wrong or its purpose can be defeated.
SOPs Simplify Performance Management
Managers rely on SOPs to judge the performance of a single employee or an entire organization. SOPs make sure that the judgment of a procedure or an employee is objective and within defined standards. These take the emotion and guesswork out of evaluation. Instead of scoring an employee on hard work or enthusiasm for the job, they can be evaluated on cognitive ability. They can be evaluated on how closely they follow the instructions to prevent loss.
When employees are following the same procedures, it becomes infinitely easier to evaluate them using the same standards. This way, appraisals, promotions, and bonuses can be handed out based on objectivity rather than promise. Low performing employees can be trained further, suspended, or reprimanded on their poor performance. High performance employees can be appraised fairly. Overall, an entire department can be made more efficient by following the standard operating procedures.
Quality Control
The generation of a product or the provision of a service is dependent on certain standards. A food product has to have the right ratio of ingredients and has to be prepared through the same technique. A ride-hailing service has to follow the right procedures to pick and drop the customer efficiently and at the right point. Similarly, any business needs to follow a set of guidelines to maintain the quality of a product or a service.
SOPs ensure that this quality doesn’t drop. Of course, the handling of every little step can falter from employee to employee, but SOPs ensure that any degradation in quality isn’t drastic. On the contrary, quality is more often maintained and improved through SOPs.
Avoiding Knowledge Loss
Every single time a good employee leaves the business, it is a loss to the company. Not only do they take with them their expertise, but the value they provide as well. This is due to the knowledge they have about the business. Of course, a new recruit won’t be able to replace the old one with the same efficiency. No matter how able that recruit is, they won’t have specific experience needed. They will need to settle in. However, through SOPs, there is a greater likelihood that there will be no significant knowledge loss.
All the knowledge that the former employee has accrued through their time there can be passed on effectively. SOPs can document any improvements to procedures or any changes made to old procedures. Hence, any addition of knowledge and any useful knowledge can be transferred to the new recruit.
Through SOPs, it’s not as hard to replace skilled and experienced workers. Comprehensive and well-written SOPs serve their purpose very well.
Training Costs are Substantially Reduced
The complexity of certain tasks in a company is undeniable. It’s not feasible to put an entry level employee at the position of a manager. However, there are some company centric tasks that require a learning curve. Hence, an SOP serves the purpose of cutting the learning curve significantly.
By giving new employees, even on higher positions, that instruction, the learning curve is successfully reduced. It ensures that they can trace the procedure to its end from the beginning. They can take their time then to understand the procedure in its full and change their approach to it in time. This way, they won’t reduce profits or reduce productivity.
SOPs are a boon to businesses everywhere. They not only condense complex processes down to simple tasks, but also provide a template for objective employee evaluations.
Pickett Fence Virtual Services provide Online Business Managers that can help you put systems in place in your company. For more information on how to create SOPs, or if your company is in need of SOPs, contact us today.
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