Policy refinement is meant to derive low-level enforceable policies from high-level guidelines. Although recent advances have been made to solve this open problem, the holistic implications confronting systematic policy refinement have not been explicitly addressed. This article presents a methodological approach towards the policy refinement problem. We provide a generic procedure to define policy hierarchies, which is essential to achieving systematic policy refinement. We also provide the considerations while defining high-level guidelines, and describe a policy refinement framework that formalizes the requirements to refine high-level guidelines into executable policies. We demonstrate the feasibility of our approach with a scenario applied to the quality of service (QoS) management domain