Page for page, a good employee handbook is probably one of the most important documents your business will ever have. Here are seven reasons you need an employee handbook:
1. The employee handbook establishes your company’s policies clearly and effectively.
“When do my benefits start?”
“Do I get paid if I go on jury duty?”
“Does this company give performance evaluations?”
“I think that guy down the hall is harassing me. Who do I complain to, or should I just get a lawyer?”
Your employee handbook should have policies for these and many other issues as well.
2. The employee handbook is a quick reference guide for employees.
You may have 500 great policies, but if your employees don’t know what they are or how to access them, they may as well be wallpaper. Come to think of it, you could wallpaper your break room with pages from the employee handbook! Hmmmm . . .
The ideal employee handbook is about 30-40 pages with a good table of contents, with easily understandable language. It should be detailed enough to answer 90% of the typical employee questions, but not so detailed that it becomes more work than it is worth to quickly find an answer. It is a handbook, not a telephone book.
3. The employee handbook protects the company from costly lawsuits.
At least half of every handbook is boring but necessary information about legal matters, what we would call boilerplate language. This language is to communicate to employees what their rights and responsibilities are (see”I think that guy down the hall is harassing me . . .”). Equally important, the handbook helps protect the employer in the event of a nasty lawsuit or even an unemployment appeal. Documenting the rules helps companies if they have to discipline or terminate someone for breaking those rules. At the very least, having “employment at will” language serves notice that the employee does not have a right to lifetime employment.
4. The employee handbook sets standards for compensation, medical benefits and paid time off.
“How often do I get paid?”
“Do I get overtime pay?”
“When do my benefits start?”
“How much vacation do I get?”
These are among the most frequently asked employee questions. A good employee handbook addresses all of these typical questions.
5. The employee handbook communicates work policies such as dress code, conduct on the job, and performance standards.
Just as employees often ask about pay and benefits, the management is interested in communicating conduct and performance standards. This is the company culture, “how we do things around here.” Every company has its own culture, and how well new employees fit into this culture plays a big part in determining whether they will make it with the company.
6. The employee handbook promotes a sense of “fairness” to all employees.
Nothing kills employee morale like the following sentence: “I’ve been here 3 years and have 2 weeks vacation, and Mr. Big just gave the new guy an extra week’s vacation because he likes him.”
Employees like to feel that they are all playing by the same rulebook. An employee handbook, if applied correctly, does just that.
7. The employee handbook saves management time by not having to explain the company policies over and over.
Can you imagine what would happen (or does happen) if every employee with a question came to you? Would you get much done? And what if you were away on business and that employee went to your assistant, who gave a different answer than you would have done? Would there be a lot of confusion? I think so.
An employee handbook is the answer. Every new employee gets one and acknowledges receiving and reading it, every existing employee gets one as well. Everyone has the same information and only come to you if there is a problem that is not addressed. End of story.
P.S. to managers everywhere: in the real world, employees will still come to you, especially if they want to plead for an exception to the policy. But at least you can say, “it’s in the handbook,” and “sorry, everyone has to follow the same rules.” Ahhhh, I feel good just saying it.
Need a great employee handbook template? Click here.