Management - Guidelines vs Rules

A lot of people think that guidelines, leaving some leeway and ambiguity, are less restrictive than fixed rules. This is certainly not the case. To convince yourself, try to answer this question: “Who decides whether an action conforms to a guideline or not?”

Perhaps you already see where I am getting to: a guideline leaves space for different interpretations, but which one is right depends on the inclination or even mood of a manager. That's why a manager who formulates more guidelines than regulations can well be the worst control freak there is.

Let me give you a real-life example: travel expenses. The document that tells you what you can and cannot claim states that the company will not reimburse you for what you take from the minibar of your hotel room. Well, we all know that drinks from the minibar are very expensive. Moreover, why should the company pay for your booze? Still, you arrive late in the evening after a full working day and hours spent in airports, airplanes, and taxis; shouldn't you be able to take a mineral water (or, God forbid, even a beer!) from the minibar on company expenses? I certainly think so.

Now, let's see the implication of having guidelines or regulations. If the no-minibar is a rule, people can, with reason, air vocal complaints. If, on the other hand, it is only a guideline, the manager can say: “Don't worry, nobody is going to make you pay for your mineral water. These are just guidelines and will be applied with flexibility and reason”. What can you answer to that? In practice though, it means that the manager approving your expense claims will be able to use her discretion, depriving thereby you of your decisional power.

One possible way out is to say that expense claims do not need managerial approval. To avoid possible abuses (there can always be rotten apples in any crate), the claims could be checked anonymously. Systematic deviations would then lead to further investigations and a tightening up of the process. Such a system seems complicated but it isn't: first of all, the check could be done by any support staff with limited qualifications. Secondly, it would give freedom to the employees as long as they do not systematically abuse it.

For example, suppose that 100 dollars daily are budgeted for meals. As long as the average daily amount spent on meals calculated across all expense claims remains below that figure, does it really matters than some might have spent 150 dollars in some occasions?

In general, a good strategy for avoiding unfairness is to reduce the level of details of the regulations. For example, why should you set separate limits for breakfast, lunch, and dinner, rather than a single daily limit for meals? Beside making the checks more time consuming, it significantly reduces the flexibility of the traveller.

So, am I suggesting that we should only have fixed rules without any flexibility? Not at all. The purpose of this section is only to show you how apparently enlightened managers can in fact leave less freedom than less flexible ones.

A possible alternative solution is to have guidelines but not leave exclusively to the manager the task of checking whether they are correctly applied or not. Suppose for example that, whenever a manager objects to an expense, a group of employees decides whether the expense should be refunded or not. It would be a real pain to do, but would quickly result in a list of applicable guidelines and, after a dozen trips, discussions be no longer necessary. Obviously, you can only apply such a method if you have established a relationship of trust with your team. Otherwise, you might discover that they always approve every claim.

Another possible solution would be to have employees check the expense claims of the manager. You can rest assured that most managers would find themselves in very tight situations. This is, in a different context, equivalent to peer or 360-degree reviews.

The bottom line on this subject is, once more, use common sense.