What Are the Disadvantages of Informal Procedures for the Employer-Employee Relationship?

Lack of structure can affect production.
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Although the idea of an unstructured and free-flowing work relationship between employees and employers might sound appealing, the lack of accountability and an informal structure can lead to workplace problems. Misunderstandings and misperceptions can ensue, which can hurt collaborative relationships, decrease productivity and impact morale.


    Informal policies and procedural guidelines between employees and employers can lead to a lack of accountability. For example, if there’s no formal policy for coming to work late or leaving early, some staffers will abide by the honor system and show up for their prescribed hours. Others will come and go as they please. This can cause resentment among colleagues and can lead to a feeling of inequitable treatment from management.


    A lack of standardization in employer-employee procedures can lead to disputes and claims of favoritism. For example, if there are no formal guidelines for conducting performance evaluations, one employee might feel more critically judged than another, particularly if fluctuating assessment criteria are used. Likewise, when it's time for raises or promotions and there are no formal guidelines for how performance and eligibility are assessed, employees may feel performance evaluation and advancement opportunities are based on the luck of the draw rather than merit.


    Regardless of how informal a work environment is or how lax the procedural guidelines are, certain employment and performance issues require disciplinary action. If no formal policy is in place for how complaints are lodged or how employees are reprimanded or disciplined, a volatile workplace may result. This degree of informality can open the company up to lawsuits related to harassment and hostile workplace activity. The lack of a paper trail regarding employee issues can make it difficult to terminate a staffer if the need arises.

Dispute Resolution

    A formal dispute resolution process gives employees a tool for handling interoffice conflict they may be unable to resolve on their own. If no such formal procedure is in place, problems may go unaddressed or handled haphazardly in a non-productive way. A manager who has no point of reference for mediating disputes may come across as ineffective, and problems can escalate. This kind of environment can result in increased employee insubordination, workplace hostility, reduced teamwork, increased turnover and lower job satisfaction.

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