Difference between Policies and Rules

Policies and Rules are two types of standing plans of an organisation. Policies are the general statements that guide thinking and channel energy toward a particular direction. However, Rules are the specific statements that inform what must and must not be done.

What are Policies?

The general statements that guide thinking and channel energy toward a particular direction are known as Policies. Policies are a type of Standing Plan and they provide a basis for interpreting strategy. A manager uses policies at his discretion. E.g. Decisions taken under recruitment policy can be in the case of recruiting employees for a new division, such as whether to recruit from the existing employees or to explore other external sources of recruitment, various policies under it regarding the salary structure, etc. A policy is used by organizations as a guide that avoids confusion and provides a structured and unified framework.

What are Rules?

Specific statements that inform what must and must not be done are known as Rules. They are formed to maintain, regulate and control the working environment.  They are rigid and do not allow flexibility. If rules are violated, then strict disciplinary actions are taken. It reflects decisions that certain actions must and must not be taken. They are the simplest type of plan which do not require changes from time to time. 

Difference between Policies and Rules:

Basis	Policies	Rules
Meaning	Policies are general statements that guide thinking and channel energy toward a particular direction.	Rules are specific statements that inform what must and must not be done.
Nature	They are general statements.	They are one of the most specific statements.
Aim	The main aim of policies is to guide in decision-making.	The main aim is to guide human behaviour.
Flexibility	They are usually flexible.	They are rigid without any scope for deviation.
Effect of violation	There are generally no penalties for violation of policies.	There are penalties for violation of rules.
Example	Retirement age is 59 years for employees in many organizations.	Rule to reach workplace before 10 a.m.