Why Your Employee Manual Matters

- October 31, 2011

"The best thing we can do to increase productivity and ensure a happy work environment is communicate"

As a Human Resource consultant, I am often asked, “Do we really need an employee manual?” or I hear “Gosh, I’ve forgotten what’s even in there.”

My reply is: “Most labor law attorneys, consultants, courts and the Department of Labor do consider an employee manual to be a contract.” Therefore,  if not written correctly, the manual may get an employer in trouble. For example, it could inadvertently guarantee job security. And if written well, it can provide clarity of intentions and expectations that are often lacking. Small business owners are often reluctant to put every single small particular in writing, for fear of sounding like a caffeine-soaked control freak.

However, putting most of it in writing is a good idea. The best thing we can do to increase productivity and ensure a happy work environment is communicate. Employee handbooks or manuals do that, and thereby increase morale. This is because when your workplace policies and practices are in writing, your employees feel they are respected. A well-written manual will be appreciated because  employees and their families know they can get the information they need about benefits, policy, procedures, etc. any time. In addition, handbooks and manuals provide the company with documentation that they are in compliance with important laws and regulations. Not stating a policy against sexual harrassment is simply asking for trouble.

So, yes, have a good employees manual/handbook. And keep it current. If it is outdated, do a re-write. An out-of-date handbook is not only useless but may also create a risk to your company. Stay current on laws and regulations and think about how your internal policies are evolving.

Make sure your manual/handbook does the following:

Proves your compliance with all applicable laws and regulations – both federal and state, and in some instances local, like our Santa Fe Living Wage.

Articulates the policies, procedures and practices that are part of your unique organization. Talk about what makes your place of employment a GREAT place of employment.

Describes the policies that you support and follow every day. It looks bad if you put a policy in writing and don’t follow it. Be very careful here regarding progressive discipline policies, as this is often interpreted as a contract. Only put this in writing if everyone is committed to following it.

Has a signature page that shows that the employee has received and reviewed the manual. This signed receipt should be placed in their personnel file. This is very important. It is the only documentation you’ll have that shows you were all on the same page at the time of hire.

Documents any revisions by showing specific changes and dates, with signed receipts. All companies grow and change. Expect to have revisions.

Your employee manual should be reviewed by a PHR (Professional in Human Resources) like me, or an employment law attorney.