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Employee Handbooks: Why They Are Essential for Your Business

Rare is the business endeavor that starts out with the purpose of becoming an employer and policy writer. As business grows, however, the need to add additional resources becomes necessary. And along with hiring people comes the very real business of managing those human resources.

Though employee handbooks are often viewed as "nice to have", employers may not realize how essential they are. Learning more about what employee handbooks can provide a business will clarify why this employment tool should be in every employer's toolbox.

Employee handbooks serve many roles. In addition to being the ideal location for putting into ink the vision and philosophy of the business, the employee handbook will be the "go-to" source of information about the company's employment practices for both employees and managers. Following are key benefits of employee handbooks:

  • Primary defense tool against legal and regulatory agency charges.
  • Communication channel for sharing values and setting expectations.
  • Reference point for managers to ensure consistent decision making.
  • Training platform for integrating new employees.
  • Improved sales and customer service.
  • Resource for employees about their work environment.
  • Process approach to organizing policies, creates order from chaos.

Primary defense tool against legal and regulatory agency charges.

The reality of today's legal climate is that it is not a matter of if, but a question of when a company will need to defend itself. Legal allegations may come in the form of a law suit or a charge filed through a regulatory agency (EEOC, DOL, etc.). Having a sound employee handbook will be a starting point of the defense. Many companies have successfully thwarted charges because they had comprehensive policies that addressed the company's practice surrounding the charge. Of course, a company must "practice what it preaches" in order to successfully use its handbook as a legal shield.

Communication channel for sharing values and setting expectations.

Clearly stating the company values and vision at the front of the employee handbook sets the tone for business conduct. Management creates the working atmosphere, and via the handbook has an opportunity to ensure that the desired atmosphere remains in synch with the business' values. Whether the message is "Fair conduct for all," or "Survival of the fittest," communicating those standards in writing helps cement them within the organization.

Writing down a company's work rules defines for employees what is expected from them while they are at work. From explaining the philosophy of promoting from within, to laying out expectations on attendance, employers with a good handbook set the expectation bar from day one.

Policies change with time, and updating handbooks provide an excellent forum for communicating with employees. Employers who look for opportunities to speak with their people find that a periodic update and review of policies is a great opportunity to dialogue with employees, and take care of annual training requirements at the same time.

Employee handbooks should be customized to the organization. Their content should reflect the culture of the business they represent. Mass marketed programs often fall short of delivering the message that management can send with a tailored handbook that reflects their values. Additionally, employee handbooks are a great place to document company history, significant achievements and awards.

Reference point for managers to ensure consistent decision making.

Managers make decisions all day long, and many of them within 2 minutes. It's why they succeed in their jobs without getting buried. But what about when answering questions regarding work conditions, benefits, work rules, philosophy, leave policies. . . can the same 2 minute rule apply here? Answer: Only if the manager is familiar with and has easy access to the business' rules and practices. A well organized employee handbook will save a manager invaluable amounts of time by providing guidance that enables fair and consistent treatment of employees. This is critical; after all, the manager IS the company to the employee, and expectations are shaped with every communication.

Training platform for integrating new employees.

There is no better time to focus on communicating the business culture than with a new employee. When the culture of the company is reflected in the handbook, new employees will gain an immediate sense of purpose for their jobs, and a deeper understanding of the company's expectations of their conduct.

New hire orientations should include an overview of the employee handbook, with emphasis on key policies that represent the philosophy and expectations of the management team. For example, these could include a performance-based compensation program, a quality program, or a conflict resolution policy.

Employee handbooks are one of the few pieces of business literature that nearly all employees read; ideally this happens at the time of hire. (They will also go to the handbook when they have a question or a problem that their supervisor has not resolved to their satisfaction.) Employers who capiltalize on the curiosity of new employees by investing in communicating with their newly acquired resources will reap the rewards of a reinforced corporate culture and clearly laid out expectations.

Improved sales and customer service.

Ultimately, all employees are in sales and customer service. All too frequently a customer has a bad experience with an employee at a business and vows never to return there again. Every employee interaction impacts a customer's opinions. How employees behave reflects how they feel about where they work, and employee handbooks can have a significantly positive impact on employees' perceptions of their working environment. Handbooks are the repositories of the business practices for managing human resources, which in turn shape the image the employee presents to customers.

Resource for employees about their work environment.

Employees typically turn to each other for answers to work related questions. "What can I do if I am being harassed?" "How is my overtime calculated?" This can spread confusion at best, and create havoc at worst. An easy to read handbook gives employees access to the facts, and sets up reality based expectations. Employees will know what they need to do, and what they can expect in return. Employees who are familiar with their handbooks gain an understanding of the business perspective. There is a real value (and comfort) in knowing the rules of the road, and where and how to get help. As mentioned previously, employee handbooks are read at the time of hire and when an employee is seeking specific information. Far too often the company rumor mill is fed by misunderstandings and half-truths. Having a good employee manual can help keep the mill in check. . . at least on work topic rule topics.

Process approach to organizing policies; creates order from chaos.

How did we handle this last time? Where did I put that? When am I eligible? How come she can and I can't? That's not fair! Clearly written employee handbooks instill order in a sea of questions. By systematically documenting the how's and why's of work rules, employers create a process for handling situations in a pro-active manner, and move out of crisis reaction mode.

Implementing an employee handbook can be an exciting process. Thoughtful attention is needed in order to craft a well-written and implemented employee handbook which can truly become an asset to your business. Support from senior management and the right combination of management philosophy, understanding the work environment, relevant legal requirements, and clear writing and organization will yield a living document that will grow and change with the business. Implementing an employee handbook is a project that will return its investment many times over.