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Policy Development for PCU La Union Affiliates


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Policy Development for PCU La Union Affiliates

  1. 1. Policy Development
  2. 2. Topic Outline           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
  3. 3. Objective To be able to formulate effective and acceptable policies for implementation
  4. 4.  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
  5. 5. 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.
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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.
  10. 10. 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
  11. 11. 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” Communicating Purpose to Stakeholders Policies & Procedures
  12. 12. 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".
  13. 13. Policy 1. Gender Equality Policy 2. Quality Customer Service Policy Underpinning Principles Equality and coexistence of men and women Increase satisfaction of members/customers and encourage membership renewal 3. Social Responsibility Policy Concern for the Community
  14. 14. 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;
  15. 15. Policy 3. Policy on Social Responsibility Legal Basis 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 Section 10 Function and Responsibilities of the Ethics Policy Committee, By-Laws Recommend ethical rules and policy to the BOD;
  16. 16. Policy Formulation and Processes Crafting a mission and vision is not easy, it helps to follow the right steps.
  17. 17. Vision Mission Objectives, Policies and Policies/Procedures Policies /Procedure Strategic Objectives Mission Vision
  18. 18.  Both statements should be meaningful to all in the organization.  It should be shared to all members to create a unified direction for everyone
  19. 19. Vision A vision statement is a futureoriented declaration of the organization’s purpose and aspirations
  20. 20. Vision Statement “ 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”.
  21. 21. 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
  22. 22. 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.
  23. 23. 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.
  25. 25. 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.
  26. 26. Steps in Policy Development
  27. 27. 1. Issue Identification and Definition Identify and define the problem or issue that necessitates the development of a policy Typically, public policy making starts with perception of a problem. Getting the diagnosis right is the key! 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.
  28. 28. Workshop 1 Identify and define the problem or issue that necessitates the development of a policy
  29. 29. 2. Policy Research and Analysis 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 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
  30. 30. 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.
  31. 31. The Policy Making Process 4. Consultation Agenda Setting Policy Formulatio n Policy Adoption revision Policy Evaluation Policy Implementatio n 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
  32. 32. 5. Developing Policy Proposal 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.
  33. 33. • 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
  34. 34. 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
  35. 35. Communication 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.
  36. 36. 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.
  37. 37. 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
  38. 38. 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.
  39. 39. 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 7. Policy Monitoring and Evaluation
  40. 40. 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.
  41. 41. Evaluation as Part of a Larger Process 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.
  42. 42. Evidence Wheel
  43. 43. • Policies are reviewed and changes or updates properly discussed and documented. • Implementation of policies is regularly monitored.
  44. 44. Policy Content 1. 2. 3. 4. 5. 6. Subject of Title Policy Statement Purpose Scope Responsibility Effectivity Optional: 1. Background 2. Definition of Terms
  45. 45. 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.
  46. 46. • 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.
  47. 47. • 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.
  48. 48. An effective date which indicates when the policy comes into force. Retroactive policies are rare, but can be found.
  49. 49. 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
  50. 50. Writing Good Policies 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 Source: Sumajit (2013)
  51. 51. Reminders policies must be 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 Source: Sumajjt (2013)
  52. 52. Documenting/Codifying Policies Policy No. 01-s-01 2013 02-s-02 2013 Subject Membership Policy Lending Policies & Guideline Resolution No Date Approved /Adopted 01-s-01- 2013 Jan 7, 2013 02-s-02-2013 January 15,2013
  53. 53. Adherence to laws, rules and regulations PERFORMANCE AUDIT REPORT 1. Duties and responsibilities of the Board well defined and segregated and duly approved - 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 3. Oversight functions of the Board Board Resolution Board Resolution Board Resolution Board Policy
  54. 54. Adherence to laws, rules and regulations 4. Polices are reviewed regularly 5. Adherence to laws, rules and regulations, 6. Duties and responsibilities of the management well defined and segregated and duly approved 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 Board Resolution Board Resolution Board Policy
  55. 55. 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) 5. Polices are reviewed regularly Board Board Resolution Policy Board Resolution Board Policy
  56. 56. 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, Board youth, and person with special needs Resolution Board Policy 3. Collaboration of Board programs/projects with any of the ff: Resolution NGO, PVOs, CDCs, LGUs, GOS, Business Organization and individual) Board Policy
  57. 57. Adherence to Policies formulated in accordance with laws, rules and regulations, and by-laws Legal basis 1. Establishment of a cooperative branch 2. Training requirements for cooperative officers 3. Article 27 (2) of RA9520 provides that "AII elective officials of the Government shall be ineligible to become officers and directors of cooperatives: 4 Article42. Officers of the Cooperative (Degree of consanguinity and affinity) 5. 10 % Limitation on Share Capital 6. ARTICLE 37 OF R.A. 9520 – Term of Office MC 2011-17 MC 2011-27 MC 2011- 03 MC 2011-04 MC 2011-05 MC 2012-20
  58. 58. Adherence to Policies formulated in accordance with laws, rules and regulations, and by-laws Legal basis 7. Implementation of training requirements for MC 2012-17 cooperative officers 8. Accountable officers MC 2012-09 9. Put up Signage in cooperative places 10. Membership Registry 11. Establishment of Satellite Office 12. Prohibition of elective officials 13. Organization of Subsidiary cooperative 14. Art 46 Compensation MC 2012-05 MC 2012-16 MC 2012-17 MC 2012-19 MC 2012–09 MC 2012-17
  59. 59. Policies on Products and Services Objectives Timpuyog ti Barangay MPC Evangelista MPC Banerle Credit Savings Mobilization Savings Mobilization Lending Lending Trading Lending Marketing Financial Services Marketing
  60. 60. Programs and Services of Cooperatives
  61. 61. Savings 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
  62. 62. Share Capital Common Share Preferred Share
  63. 63. Loan Express Loan Regular Loan Special Loan Privilege Loan
  64. 64. LOAN Regular Loan Providential Loan Commercial Loan Financing Loan Commercial Loan
  65. 65. 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
  66. 66. LOAN Privilege Loan Petty Cash Farmers Assistance Rice Loan
  67. 67. Other Services Automated Teller Machine (ATM) Health Care Assistance Program Mortuary Assistance Program Life Insurance
  68. 68. Policy Constraints 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.
  69. 69. Hence we should not operate in a vacuum but instead a policy space. Our space overlaps the space of many other Community organizations with whom we must so-exist peacefully Webb, Rowland and Fasano, (1991) . Government Coop Policy Union Federation
  70. 70. 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.
  71. 71. • 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)
  72. 72. 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.
  73. 73. 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
  74. 74. • 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.
  75. 75. • 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
  76. 76. • 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
  77. 77. 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.
  78. 78. 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
  79. 79. • 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.
  80. 80. • 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.
  81. 81. 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.
  82. 82. 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
  83. 83. • 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
  84. 84. 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.
  85. 85. Organizational Policy Business /Operational Policy
  86. 86. A. Organizational Policies SMCBUP Membership Education & Training Internal Control Ethics Human Resource
  87. 87. B. Business/ Operational Policies Lending Trading Marketing
  88. 88. Reference • Oro Integrated Cooperative • Sacred Heart Savings Cooperative credheartsavingscoop • Narra Multi Purpose Cooperative
  89. 89. Reference • SACDECO • Tubao Credit Cooperative • Gledco • Griffin, Michael. How to write a policy manual at
  90. 90. References • Leo Isaac. What are policies? .htm • Maribeth R. Sumajit (2013) Policy Formulation at • Josefina B. Bitonio (2012) What is policy?
  91. 91. Workshop 2 From the issues identified formulate a policy for your cooperative