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Tips for developing an employee handbook or policy manual

  • October 2019
  • Number of views: 4165
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Mike Parsons
Hupp Electric Motors Co.

Hopefully your business is growing. You’re making more sales, acquiring new customers and purchasing more equipment. Now you just need more time, right? 

Regardless of the size of your business or the number of employees, you should consider creating an employee handbook or policy manual. While often overlooked, this publication could be one of the most important documents a business owner produces.

The employee handbook conveys your expectations as an employer and provides employees with a clear vision of what they can expect from the company, making this an indispensable communication tool.

Developing the handbook
When composing your handbook, write it as a quick reference guide for your employees. 

Here are some important considerations, especially for those in the U.S.:

  • Try to not exceed 20 pages in length. 
  • Include the effective date and version number on each page and a statement indicating the current version replaces any previous version of the handbook.
  • Ensure consistency among all other documentation used within your company.
  • State clearly in writing that the handbook is not a contract, and the employer/employee relationship is “at will” and can be ended at any time with or without cause. 
  • Have a section concerning equal employment opportunity and harassment.
  • Document a list of behaviors subject to discipline and note that the list is not all inclusive. Because you cannot list every possible behavior, indicate the list “includes but is not limited to” the examples.
  • Consider a section regarding email, internet, and cell phone usage. 
  • State that you have the right to revise the handbook at any time.
  • Incorporate sections specifically regarding safety and emergency procedures, security, work hours, benefits, overtime, vacations and compensation.
  • Define the terms you use such as “excessive tardiness,” “insubordination,” “overtime,” and use general language. This gives you the ability to revise the handbook easily. 
  • Avoid statements binding you to a specific course of action.  Again, use general language such as “typically,” “usually” and “may.” Clearly state you reserve the right to deal with situations as they arise and use discretion when choosing the remedy. Note management discretion will be taken into account when policies are applied.
  • Require employees to sign a statement indicating they have received and read the handbook and understand its contents. Place a copy of the statement in their personnel folder with human resources. 
  • When updates are made to the handbook, provide all employees with the most recent version and have them sign updated statements of understanding.
  • Ensure supervisors or managers (if you have them) understand their discretion is limited and they cannot modify the handbook. It is very important for them to know what is in the handbook and what they can and cannot do. Consider supervisor training on certain policies or sections in the handbook.
  • When you have your handbook finished, it is imperative to obtain legal review and guidance as needed to ensure the handbook does not contain any unlawful language or provisions which may be interpreted as a contract and the handbook adheres to all federal, state and local laws. The handbook should clearly define the legal obligations and rights of both employer and the employee. 
  • Review your handbook every two to three years to ensure its contents are still relevant and up to date. Again, seek legal review and guidance pertaining to any revisions. 

Common trouble areas include policies on discipline/ progressive discipline, layoffs, severance pay, probationary periods, performance reviews, work rules and benefits. These definitely warrant legal review.

Additional topics
An employee handbook can contain a variety of topics.  Make it your own. It does not have to be an intimidating read, full of “dos” and “do nots” and consequences. You can have it be as personal as you wish. 

Other sections may include:

  • A “welcome to the company” message 
  • An explanation and the purpose of the handbook
  • Your company’s history, mission statement, values and goals
  • Training & professional development opportunities
  • Pictures 
  • A few success stories of other employees 

Not so long ago, hiring an employee was a fairly simple process.  Take out an ad, review applications, interview prospects, hire the best applicant and have them come in and go to work. You did not need to spell out what you expected. 

Times and expectations have changed.

It is the same with the employer/employee relationships. The dynamics have significantly shifted and management needs to change as well. Change or get left behind. 

Dollar for dollar, an employee handbook may be the best investment you make this year. 



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