All companies have certain rules,regulations and terms and conditions followed by the employees to excel in the job performance. Policy letter is a kind of document given by organizations with a set of terms and conditions, which is mandatory for the employees to follow.

Policy letters are used to convey certain policies regarding benefits, salary structure, vacations, leaves, compensations holidays, travel, medical, loan etc.It also includes disciplinary actions that would be taken if certain rules are not followed. There are changes in the policy every now and then and these changes are informed to the employees through the policy letter highlighting the changes.

Policy letter should clearly explain the terms and conditions of any particular topic. For example,if it is for leave it should clearly mention how many leaves an employee is entitled to take in a year and what kind of leaves, if the leaves are exceeded how does the company take care of it, if it would be taken as a leave without pay or of it is carried forward in the next year. The employee should have the clarity about the subject.

The language should be simple and easily understandable by the employee. Policy letter contains contents that both the employer and the employee have to follow.