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Importance of an Employee Handbook

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Importance of an Employee Handbook

An employee handbook or employee manual is a booklet that contains information on an organization’s policies and procedures. It is an excellent resource that presents all the information which employees need to know about their work and workplace. Thus, it facilitates the smooth functioning of a workplace.

There are several reasons why an employee handbook should be in use. Some of them are as follows:

  • Employee manuals bring in uniformity across the organization. They set guidelines for everyone to follow and categorically state the consequences of violating these rules. Employee manuals inform employees of statutory laws regarding workplace behavior with colleagues and the management. Thus, they help prevent workplace conflicts and legal disputes.
  • With a well-planned and written handbook, you can save your managers’ time. They need not explain the same policies every time a new employee joins or answer the same questions over and again.
  • Employee manuals publish information on an organization’s policies about holidays, leave, work hours, overtime work and pay procedure, dress code, performance reviews, salary or pay revisions and recreational breaks. They present information on orientation and training policies and termination or relieving procedures. This helps employees know a lot about the kind of treatment they can expect in the organization, thus, building their confidence.
  • Employee handbooks help communicate to the employees about the Company’s expectations of them. You can convey performance parameters and benefits that employees receive on reaching those parameters. Policies about promotion or demotion should be included. This will help them gain clarity on their job responsibilities and reduce the start-up time.
  • Employee handbooks present the organization’s policies on using the Company’s as well as personal gadgets and other equipment within its premises. Some organizations have restrictions on the use of information and communication devices, most importantly, mobile phones. Handbooks should include the terms and conditions for the use of these devices and the sites the employees are not expected to visit etc.
  • Employee handbooks publish the Company’s policies on employee safety measures and procedures to handle occupational accidents or hazards.

Precautions to be taken while preparing employee handbooks

Employee handbooks should be written in simple and precise language. Avoid flowery language. Besides, there should not be much legal jargon or it will confuse the employees.

Since employee handbooks are an effective means to protect an organization from potential lawsuits, they should be kept updated. This is because laws change. Accordingly, you need to modify your policies and publish them in your handbook.

You need to plan in advance how you are going to deal with issues that are not included in the handbook. Sometimes, certain incidents or complications arise which were not thought of while preparing handbook. In such circumstances, you should not find yourself baffled. For that, you need to specify that the policies and procedures are subject to change from time to time.

Thus, appropriate care should be taken to see that the handbook presents your organization in a positive light.

Do share your thoughts on the same.

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  • Alejandro Mayer

    Hi Asma: I agree, but the problem is the update. I remember the problems I use to have with the printer´s times vs the new matters to annnounce the employees. May be an electronic handbook could be the solution. Best Regards

  • Kenda Marks

    Documentation of guidelines is important for all the reasons you stated. An on-line format eliminates the need to replace old paper content and you manage versions more efficiently with easy access to information for everyone.

    I liked that you highlighted the plain language factor as well.

    Lastly, Update. Update. Update.

    Great post!

  • Janice Crompton

    As well as policies and procedures there needs to be a booklet about facilities, printing, storing data etc. In my last job I continually answered questions from new and transferred employees about some of the smaller things that in some cases people had spent a significant time trying to find out on-line or asking others, often department/section wide only. I started to keep a list of questions that people asked and then added the answer and created an on-line question and answer section. The difficulty of course if keeping it up-to-date but if you get a good team spirit then everyone should be involved in ensuring it stays current with one master owner.
    I always gave an induction session to new/transferred people into the dept. This went through the organisation, objectives, people & major processes of both the company and the department. In addition it went through the main contacts for main activities and provided the links to information which would be useful. After the induction session I asked people to go and spend time going through the links so that they could see what was avaialble and then arranged a further session to see if there was any other information they needed. It helps if as an organisation they have the main activities/procedures covered.

  • Michael Stanway

    There definitely needs to be a central source of information within any company to ensure that the Culture of the organization is understood by all. As Janice says, it needs to contain not only culture but also the day-to-day issues like how to store date, how to deal with emails, what the naming convention for files should be. If all that you feel important is not contained somewhere than people asking other people what to do will quite quickly result in a “Send three-and-fourpence we’re going to a dance” scenario, if that quote is still understood:-), and the correct process will drift away.

  • We provide a manual that incorporates both an Employee Manual and a Full Procedures/Processes Manual for an insurance agency or brokerage. It complies with all best practice standards. It includes Mission Statement, personnel rules, A Benefits Section, Service Standards, all workflows, job descriptions, and more.

    Our website above also includes employee testing, both for general appropriateness to specific positions, but also skill tests in a variety of specific technical insurance lines of business and in tools like WORD and EXCEL. It also includes tests on E&O awareness, insurance bookkeeping, and technology ability.

  • Coming from a project managers prespective I agree documented employee processes is extremely important to an organization and in fact very important to a project manager. These should be very easily accessible and understandable. If there are documented processes then even if exceptions have to be made they are made in more informed manner.

    In my experience a common set of understood employee processes reduces time spent by the project manager on non-project specific tasks.

  • Ronald Adler • Employee handbooks are a double-edged sword: handbooks that are aligned with strategic and business objectives, are properly drafted, and are effectively implemented: Enhance the employment brand; play a key role in recruitment and retention; enhance employee relations, employee morale, and productivity; contribute to uniform and consistent application, interpretation, and enforcement of organizational policies and rules; protect the organization against claims of improper employee/supervisor conduct; and reduce the organization’s exposure to employment related liabilities.

    Conversely, employee handbooks that are misaligned, improperly drafted, or ineffectively implemented: Undermine the employment brand; mislead employees about what is important and misdirect employees about what action they should take; reduce employee commitment and engagement; increase the risk of employment related claims and lawsuits; and increase the organization’s vulnerability to third party intervention.

    As our recent nationwide survey or employers reported, there is a mismatch between handbook policy statements and effective handbook practices that enhance the value of the handbook.

    Please let me know if you would like a copy of our employee handbook survey report.

  • I believe in employee handbooks however, until employees have a part in writing them and adding or detracting from them, such books will for the most part be ignored.

  • I think it is very important to have a handbook that should be given to all employees, especially the new hires. The book should have the general information about the company, the high level organization chart, information about the location they are working and some important phone numbers. Our company does not have any such thing but anytime I start a new job or someone begins a new job in my group, I make sure that there is something that is given to them that contains such information. Even if there is no official document, it does not take long to create an unofficial for yourself or for your group. It really helps. It is even better if the handbook is catered to the location and the department that individual is in.

  • I believe employee handbooks are absolutely necessary from a legal perspective. However, the most value within the organization is 1. the time saved for managers and human resources in policy, program and practice explanation (so they can focus on other important things) and 2. the information they provide new employees in the context of processes, who to contact etc. so they can hit the ground running.

  • I think that a company should have an employee handbook containing the appropriate policies and procedures, only if the representatives of the company are prepared to follow what they have put inside the handbook. Otherwise, the handbook becomes useless and can be used against them. Aside from that and assuming that the organization will follow what they have put inside the handbook, yes, I think a handbook in place. For some companies, more specificity may be necessary around certain policies, whereas for other companies more flexibility may be necessary for some policies. You have to weigh the needs of the business, how the proposed policies/procedures will support the business goals, etc. Also, the handbook is an excellent tool to use in communicating and reinforcing the company’s values, ethical principles and standards. It does not have to be just about what not to do, but more of what to do so everyone in the company shares a common understanding of the expectations, goals, etc., which allow for team and organizational success. Lastly, an employee handbook, one that is written correctly, can be a company’s saving grace in the event of a lawsuit of some type.

  • In my opinion, an employee handbook is effective when written policies follow practice. However, not all organizations benefit from insituting an employee handbook. Further, in my opinion, if a company insitutes an employee handbook, it ought to address all employees, not a select category or classification alone (you can have an all employee and manager’s handbook), and it ought to be translated into the language of the employee population who do not speak English as a first language.
    I’ve experienced situations where management has instituted a Handbook only to comply with recommendations from legal counsel, human resources, etc. In reality, application of policies were inconsistent with written policies and when taken to task, practices do indeed become policy. Not all the time is having in writing, the best policy, especially for small businesses.

  • It is very important for any company to have an employee handbook which sets out quite clearly policies and guidelines. There can be misunderstandings if this roadmap is created. Staff members will also have a better understanding of important and basic labour laws that affect them as they too should be included.

    In addition, SOPs are recommended for ease of training new recruits and point very one in the right directon.

  • Natalie McGregor

    We have an employee’s handbook – which is so out of date that we have basically stopped using it! All of the above comments are helpful and as a member of staff I feel it’s only fair to have a one stop shop to find out all the answers you may need BUT ONLY IF IT IS UP TO DATE! I am sick of going to HR to have them say “Oh that policy is out of date now” or seeing something on the intranet that says “being updated”. This is not helpful when it goes on for months!

  • Without doubt all employees should have an handbook, how it is perceived by employees is another thing. Is it a rule book? Why should an employee engage with it?
    In my experience employees will not engage if they see it as another tool used to bash them over the head with. Therefor it should have value not only for the organisation but the employee aswell.
    How you sell the concept to the employees will be important highlighting not only how policies and procedures protect organisations and individuals but also how policies and procedures can have benefits for the employees.

  • I read many views, and quite rightly, the fact that handbooks become outdated and have also experienced this myself. Cost seems to be a factor in not updating handbooks. If an organisation does not value up to date policies and procedures then I am sure employees will not value them!
    It seems to me responsibility is the problem, who is responsible? HR would be the obvious choice but are they being supported from above with for example resources, or could it be that tomorrow is always another day.
    We can always find reasons not to do things but surely a loose leaf type handbook would be more cost effective, maybe not intitially but in the long term as it would be easier to update.

  • Its always good to have an employee handbook. This makes the employee feel comfortable in the beginning as he does not have to find somebody friendly to ask each and everything in the beginning. I have often experienced this situation where in you wont know most of the procedures(obviously) when you are a new joinee and one feels uncomfortable to keep on asking doubts to fellow colleagues.

    Whether it should be e-book, or hardcopy, whether it should be given to all employees or kept at all offices so that you need not print in large number can be decided later.

    But definitely employee handbook relating to each and everything small things should be provided.

  • I found out recently that the Supreme Court and other Courts have begun to recognize the term ” Employee Handbook ” as an implied contract. I recently redid ours but changed it
    to ” Policy Guidelines” based on a consultants advice. Pertaining to what is included in the “Guidelines” a concept generally included in it is critical right now in my opinion and many companies have no idea how much paid time off in banked up against them under their current handbook. In Illinois it is state law that all accrued paid time off be paid upon separation regardless of reason. I eliminated carry over of Vacation and saved 50k per year for a small company with 40 employees. We still allowed carry over of personal days. Many small to midsized businesses are struggling with increasing costs of benefits, I suggest as a belt tightening look to how generous is your paid time off. Reassessing what you promise up front may produce some cash to help with benefits. Below is a link regarding “Employee Handbooks” and ” At Will Employment” in recent court decisions.
    Bob Eaton, PHR

    http://www.myemploymentlawyer.com/wiki/Implied-Contract-exception-to-Employment-at-will.htm

  • Susan Wu

    If a company internal online system is strong enough, it is not necesarry to hand over hardcopies to employees. Cause, things can be more efficiency. With powerful system, we can also provide some functions which are not easy for hardcopy. For example, imediate update, FAQ search, more interactions…

  • I absolutely agree. The handbook should be fit for purpose though.

    You get some organisations who have pages and pages of policies on every subject. The danger is they are not read by anyone and become ineffective.

    For any size organisation you must legally have disciplinary and grievance procedures that are referred to in the employment contract. They dont have to be contractual, but the contract must mention them.

    You must also have a Health and Safety policy statement.

    Plus I would always advocate clear information and policy on discrimination and equal opportunities.

    From then on its a game of opinions and depends on the size of the organisation. For example, you dont need pages and pages on parental leave, if you have a handful of staff, as the liklihood of an application is almost zero.

    Our Target HR standard handbook is around 40 pages and is more than enough for most small to medium sized organisations.

    The other thing to remember is to have a strict timetable for keeping the handbook up to date, at least twice a year when statutory law changes, and also when interim case law or best practice changes occur.

  • It is definetely important and I’d add that it should include the organization’s culture so the new employee would figure out if he fits in it.

  • YES, and..
    because of the general loss of reading and reading comprehension skills, the handbook should be digital and use as much video as possible.

    Instead of handing out copies to employees, there should be terminals in cafeterias and breakrooms where employees can readily access the handbook. Especially the sections on benefits – medical, sick leave, vacations, etc. – since these are the ones most frequently viewed.

    I also like having the handbook on a website where employees can access it at home or using their phone, but realize there would be some security concerns there.

  • An employer should have a procedure in place to ensure that the handbook is updated regularly – either a periodic review put in the diary (and advice sought from an HR professional or employment lawyer at the time) or an arrangement with one of those professionals to review the policies when new legislation demands it.

    The other thing to remember is to circulate the handbook to all employees, or draw their attention to an online intranet version. I cannot count the number of employees who when asked about the company handbook have said that they know of one, but have never seen it or been given a copy. That makes it much more difficult for the employer to rely on the contents if it is not disseminated properly to their employees.

    A good idea is to include the handbook in the induction procedure for new employees, and ensure that existing employees receive the updated sections as they are updated.

  • First of all it must be given out in whatever form either electronic access or written form as a mandatory part of the onboarding or new hire process. Since you don’t give out the booklet until someone is hired I would be uncomfortable with stating a company culture. I believe that could lead to someone feeling a hostile enviorment, or discrimination if you just hired them and they have philosophical or ethical differences with the company culture. I think that is thin ice to be putting out publicly. The culture should be individual accountability, recognition, customer service exceeding expectations, and increasing the value and profitability of the company which is where any security relating to employment should come from. Value of service or product should be equal to or exceed the value of currency charged. That in my opinion should be disseminated in the Company website advertisement and in recruiting ads and literature before they are in the hiring process. It creates a form of informed consent.

  • There are two critical roles played by the Employee Handbook:

    #1) Proactive tool for informing and educating staff as to acceptable behviors in the workplace. Combined with some form of signed acknowledgement, this should be done during orientation and when any changes to the manual occur.

    #2) Reactive tool to protect the organization from litigation. As Ruthie and Liz pointed out, if you do not have a handbook, employees may claim the “you never told me” defense if charged with sexual harassment, fraud and other workplace crimes.

  • Rod Smith

    Yes, it is important to have clear policies and procedures recorded. I worry when organisations are controlled by their procedures or Service Level Agreements. People can sometimes hide behind them with the excuse that something isn’t specifically stated in the procedures.

    Ideally, these should be understood as minimum standards, not a definitive course of actions.

    Obviously, in some cases, a definitive procedure is essential, such as safety procedures.

  • When doing our new ” Policy Guidelines” we used the phrase that
    “violations may lead to diciplinary actions up to and including termination.” that way we are not obligated to use a one size fits
    all reaction to situations. Rather it lets us use the unique case by case approach. The caveat is you have to watch for establishing patterns of preferential precedents toward a particular group base on race, religion, sex, age, etc.

  • An employee handbook is essential; and as others have already said, it must be kept up to date.

    One poster said that it was a double-edged sword, because it can be used to beat managers over the head; that is missing the point because if the handbook is being used for that purpose, then it is that manager who is doing their job wrong. Any employment relationship is a two-way street, and managers, who are employees too, have to folow the rules just like everyone else.

    Another poster commented that without employee input, employee handbooks can be misinterpreted by employees as something else to beat them with. The answer is to engage with employee representatives in the drafting process, where they exist. Often, eepecially if they are representatives belonging to a formal trade union, they will have had training from the union in what should or should not be in an employee handbook. In instances like this, the union has been a part of the solution, not part of the problem.

    Many organisations are making their employee handbooks contractual, as much to make life easier for the employer as to tick employment law boxes. This is all the more reason to get them right from the outset. And the words “This list is not exhaustive” can cover a lot of situations for both employee and employer.

  • Yes such a tool is definitively a must have, should be updated (key for a real usage) and available at any hierarchical level. Such a Company bible is an asset if it is correctly conceived and maintained.
    It should not be the product of a unique department even if somebody has to catch up with the responsability of it.
    It should include a clear description of company strategies, policicies, rules, organisation, delegations of power, key documents, key information systems. It should never become a closed document but a real life reference, and an effecient update process should be put in place.
    You speak of a book, I would rather speak of a key data base, because the most effective way of having it maintained and accessed to is to conceive it as an information system that everybody in the organisation should be able to reach in situation (from the clients premises, in the plane, from home or from the office (Internet could help Priopps as well).

  • Mariam va Deventer Breed

    On paper or on line, there needs to be a Definition and Acromym Section included in the document:This section not only clarifies any jargon, but also invites the new employees to join the company’s mindset and culture at a deeper practical and human level.

  • Jacque Vilet

    If this is US only I have nothing to add. But if for other countries there is serious risk in using them. For one thing employees employement contracts they already spell out most everything a handbook would anyway. I have talked to several big time international labor lawyers and they are not in favor of it. Go to White & Case website (law firm) and pull up Don Dowling and see an article he has written on the subject.

  • Employee handbooks are very important, however traditional employee handbook formats are very inefficient, very expensive and not very effective. Traditiona formats include binders, manuals, portals, intranets, shared drives, memos, etc. and a big problem is how do organizations know if anyone ever read the employee handbook or if anyone understands the employee handbook or if anyone has accepted accountability for the policies and procedures that apply to them?

    Charles Darwin nailed it when he said it is not the strongest nor the most intelligent that survives…it is those who are most responsive and adaptable to change.

    Employee handbooks must be updated on an ongoing basis and to ensure all appropriate individuals have the lastest situational awareness so they can be more adapatble and accountable for their decision making even as every organization faces continuous changes.

    Innovative and visionary platforms are available to help prevent the preventable and ensure better decision making WITH individual level situational awareness, accountability, adaptability and auditability too for legal due diligence, regulatory due diligence, compliance examinations, internal controls, enforcement and much more.

    Yes, employee handbooks are important but only if employee handbooks are proactively updated, tracked and documented so organizations can enforce their policies and procedures and connect the dots for better results and successes.

    And one more thought, yes employees handbooks are important and if the employee handbooks are any good they more than likely contain confidential and private information that should not be accessible to just anyone that logs into an intranet or shared drive or just anyone that gets their hands on a manual or binder.

  • David Gabor

    Every employee should receive the handbook and policies as part of the “on-boarding” process. That is critical! HR should have a signed receipt that the employee received the documents and that should be maintained in the personnel file. In fact, it should also indicate which version of the papers the employee received.

    This is for compliance and risk management purposes. Further, this is part of morale. As you stated, this sloppiness hurt you.

  • Mel Patterson

    I agree with many of the comments above, however, having an employee handbook can, and often does, change the “at-will” nature of the employment relationship (if you’re in an “at-will” jurisdiction).

  • Pervez Majeed

    I agree, An employee hand book is a good way to welcome a new employee. It helps the employee settle down quickly and feel at home by finding contacts for the people he might need in the first few months instead of asking around in the new environment. It’s best use for the employee is when he is new and not after 6 months into the job. The benefit to the employee is obvious but the employer can also benefit from it by providing the details of all the benefits provided to the employee and its cost summary for on each employee. Most employees will be shocked to see this number and start appreciating the employer after seeing the healthcare cost and other benefits cost that are borne by the employer which are sometimes not that obvious to the employee.

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