The two terms are NOT interchangeable at all!
Policy defines the value systems and guiding principles of an organization. These represent the durable approach of the organization on any issue of interest to the organization.
Procedure, on the other hand, is the way how the policies will be translated into reality. Policy describes the stance of the organization on any issue, and the procedure details the actions stipulated to translate an abstract stance into a visible, concrete reality!
Policy is to be free of caste, creed, and religion considerations in matters of recruitment. The procedure would ensure that the organization, in fact and in reality, has a workforce free of such (undesirable) biases.
Clear?
Regards,
Samvedan
December 7, 2005