The Case for an Employee Handbook

Long before ever starting my own firm, I served as a manager in a variety of capacities in firms big and small. One of the things that made my job easier while managing employees in large companies was that they tended to have detailed management procedures and employee handbooks that documented the company's policies.

In addition to lots of other valuable management advice, I was told early on that it's not a question of "if" a company is going to be sued but "when". So, not long after starting my own firm, I created an employee handbook that includes policies that cover:

  • Equal Opportunity Employment (Important

  • Fraud, Waste & Abuse (What it is and what to do if they suspect it)

  • Proprietary Information - (What it is and how it should be used)

  • Health and Safety Information (Laws applicable to the company)

  • Email Usage (It could be used in a court of law)

  • Safe Workplace (One that's free from sexual harassment and workplace violence)

  • Drug and Alcohol-Free Workplace

  • Employee Benefits (Holidays, leave accrual, benefit eligibility, etc.)

  • Time Reporting (Core work hours, time reporting requirements, etc.)

  • Pay and Salaries (When to expect a performance review and potential increase)

  • Disciplinary Actions

I provide the handbook to prospective candidates when I make an employment offer. I do this to ensure the candidate has enough information to make an informed decision about the company's way of conducting business. I require each new employee to sign an acknowledgement that they have received it, understand it and intend to comply with the policies that are outlined therein.

I do use a progressive disciplinary process. It's the kind where an initial infraction leads to a verbal discussion, followed by a written warning and so on until termination becomes an option. Human resource consultants tend to fall on either side of the debate as to whether or not to have a progressive or loosely defined disciplinary process.

In my experience, it's been beneficial to use this method because it creates a paper trail that both you and the employee can refer to, and it eliminates confusion with respect to your expectations as a manager.

I can remember a time when a former employee filed a wrongful termination lawsuit against the company I was working for. I was surprised to find that I was personally named in the suit along with other representatives from the company. Even though the company had a legal department, I was required to provide a lot of detailed information about my interactions with the employee. The documentation I created along the way from initial warning to eventual termination made it very easy for me to respond factually when preparing the affidavits associated with the lawsuit.

On more than one occasion, perspective candidates have told me that they viewed the employee handbook as a sign of the company's commitment to creating a professional workplace environment, and that it helped to provide a point of reference when they had questions regarding time reporting, leave policies and benefits.

From a business standpoint, the employee handbook has been beneficial because our customer base include the local, state and federal government agencies. When submitting proposals, we are required to indicate whether or not we are in compliance with EEOC and other labor regulations. The handbook is written proof of our commitment.

There's a short guidebook on How to Assemble an Employee Handbook in the August 2008 issue of Inc. Magazine. You should check it out and share your thoughts.