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HR Policies
Why Do We Need Them and What Should They Look Like?

ALL ORGANIZATIONS HAVE SOME TYPE of policies and procedures. There are practices regarding what time to report to work in the morning, how much vacation time an employee may take, and the days when paychecks are released. Without these rules, it would be virtually impossible to run a business efficiently.

Although all organizations have policies, the manner in which they are documented and presented to employees varies considerably. There are companies with extensive policy manuals and those in which nothing is formalized in writing. Some businesses write their procedures in great detail, leaving nothing to individual interpretation; others present only broad, general provisions. Other than practices specifically required by law, there are no specific rules on how to document and implement the principles and practices by which a business is run. Therefore, the form, substance, and tone of an organization’s policies and procedures are totally within your discretion as a business.

This discretion presents both a challenge and an opportunity for a business. The challenge is deciding among almost infinite choices on how to define, structure, implement, and communicate the company’s rules of operation. As for the opportunity, a sound and appropriate set of policies will lay the groundwork for supporting the company’s business objectives, providing employees with the necessary guidance, and achieving the desired organizational culture.

“Should our company policies be in writing?”

Having a set of written policies enhances employee understanding of company rules and expectations and encourages communications between employees and supervisors and among workers in general. It is neither necessary nor desirable to have every rule and practice documented, but it is advisable to take the time to formalize the important ones. In addition, having certain policies in writing—such as rules prohibiting unlawful discrimination and harassment—may save an organization a lot of time and money in the event of a lawsuit.

THE EMPLOYEE HANDBOOK

The employee handbook is the most common way of documenting policies and procedures. If you have worked for several employers, you have probably seen a variety of handbook types and styles, or even worked without a handbook.

“Should our company have an employee handbook?”

Some organizations pride themselves on informality. They believe that an employment or policy handbook only adds needless bureaucracy. Other businesses, fearful of lawsuits, are afraid that they will “say the wrong thing” in the handbook and unwittingly encourage employee lawsuits. While it is true that a poorly crafted handbook may create legal troubles, the advantages of having an employment handbook far outweigh the negatives.

A good handbook serves a variety of useful purposes. The document informs employees about company policies, procedures, and practices and can communicate expected standards of performance and conduct. The handbook is a reference guide to help managers and supervisors take appropriate actions in a given situation. Without the handbook, supervisory employees are left to their own devices, which can lead to uninformed, inconsistent, and possibly illegal decision making. A well-designed handbook can positively influence employee morale and promote employee loyalty. It can introduce a new employee to the organization, providing information about company history and facilities and helping the individual to fit in more easily. In addition, a manual can create a sense of consistency of practice that will enhance the employee’s feelings of being treated fairly.

If the employee handbook is carefully drafted, it can be an important tool to avoid liability in employee lawsuits. The employer that clearly states policies against discrimination and harassment based upon race, color, gender, religion, sexual orientation, age, or other protected status; outlines grounds and procedures for termination; and follows these guidelines over time will be in the best position to defend against charges in these areas. While state and federal laws sometimes require that certain policies and procedures be posted on employee bulletin boards or other public places, distributing a handbook to all employees ensures that the company’s critical standards are accessible to all and that each employee will have a reference when questions arise.

“Where do I begin in developing an employee handbook?”

The task of preparing an employee handbook can seem daunting to smaller organizations or to employers without large human resources staffs. But keep in mind that the basis for most of the material in the handbook already exists in your organization. Even if you have never before had an employee manual, you are already operating under a system of informal or unwritten policies and procedures. You may even have previously documented some of them in internal office memos. Think of your handbook as a formalization of standards and practices that, to a large extent, are already in use.

There is no single way to write a handbook and there are no established rules regarding the inclusion of policies and procedures. Some organizations choose a formal writing style; others choose a more friendly, conversational tone. Many of these decisions are up to you, the employer, and they depend on the unique culture of your organization.

Whatever you do, avoid the temptation to merely copy another organization’s handbook. Laws vary widely from state to state, and practices differ depending on the industry or labor market. What may be applicable to one employer may not be relevant to your organization. In addition, if you do not take the time to develop your own employee handbook, your organization will miss out on the opportunity to convey to employees the elements that make your organization unique.

“What policies should the employee handbook contain, and how should I organize it?”

In general, an employee handbook should contain answers to the questions most frequently asked by employees. Furthermore, the employee handbook should have information pertaining to basic employment matters that all employees should be aware of.

The best employee handbooks are organized logically, with the policies grouped into sections. The pages should be numbered and there should be a good table of contents so employees can find specific topics easily. Here are examples of frequently used sections and the policies and procedures that might be contained in each.

Introductory or “Welcome” Section

This section of the handbook serves as a welcome for new hires and an orientation for existing employees. It generally includes information about the history of the organization and its mission and values, as well as an explanation about the purposes of the employee handbook. Many handbooks begin with a letter of welcome and appreciation from the head of the organization.

Because the introductory section is usually the first part of the handbook that people read, it will influence employees’ impression of the employer and their willingness to continue reading the policies. Make sure the tone you set in this section is consistent with the way you want your employees to view your organization and its leadership.

Equal Employment Opportunity (EEO) Policies

Begin this section with a statement that the organization is committed to equal employment opportunity and a healthy work environment that’s free of discrimination and harassment of any kind. After this initial statement, the section should detail the individual policies, including:

• EEO policy (affirming the organization’s commitment to providing equal employment opportunities to all, regardless of gender, race, religion, sexual orientation, age, marital status, and other protected status, and to following the law in all respects in connection with providing a fair work environment)

• Antiharassment policy (prohibiting harassment based upon gender, race, religion, sexual orientation, age, or any other protected category)

• Americans with Disabilities Act (ADA) policy

Employment and Compensation Policies

This section contains the policies regarding the day-to-day nature of an individual’s employment and compensation. Topics can include:

• Hours of work

• Meal/break times

• Attendance policy

• Overtime policy

• Time records

• Pay periods

• Transfers and promotions

• Performance appraisal system

• Personnel records

• Introductory/probationary period

• Standards of conduct

• Dress code

• Solicitations, distributions, and use of bulletin boards

• Confidential information policy

• Theft of company property

• Smoking policy

• Employment of relatives

• Computer, e-mail, and Internet use policy

• Facebook and social media policy

Time-Off Policies

This section contains the organization’s policies related to time away from work, both paid and unpaid. Policies and procedures covered here can include:

• Vacation time

• Personal days

• Sick days

• Holidays

• Bereavement leave

• Jury duty

• Military leave

• Family and Medical Leave Act

• Unpaid leave of absence

Employee Benefits

The handbook should describe general information regarding benefits offered to employees, including the availability of:

• Health and dental insurance

• Life insurance

• Short- and long-term disability insurance

• 401(k) plan

• Pension plan

• Flexible spending accounts

• Tuition reimbursement policy

• Workers compensation benefits

Employee Safety Policies

In this section, emphasize the organization’s commitment to the safety of its employees and include those policies reinforcing that commitment, including:

• Safety rules

• Procedures for reporting an accident

• Emergency procedures

• Procedures for responding to and preventing violence in the workplace

• Policies prohibiting workplace substance abuse

• “Guns at Work” regulations (Several states have recently adopted legislation prohibiting employers from preventing employees from keeping guns in their locked vehicles on company premises. If your state has such a law, create a policy that clearly defines applicable employee rights and restrictions.)

Corrective Discipline/Termination Policies

This section is particularly important from a legal perspective. While progressive discipline and termination policies can be helpful in defending against wrongful termination lawsuits, courts will closely scrutinize these policies when these suits arise to determine whether they were (a) reasonable and (b) consistently followed by the employer. Avoid inflexible, highly detailed disciplinary and corrective action procedures, because there is a good chance that your managers will not follow them to the letter. Corrective action policies should include language that allows the employer the discretion to skip any or all of the steps of the disciplinary process. Policies covered under this section might include:

• Open-door policy

• Internal complaint procedures

• Forms of potential disciplinary action

• Internal investigations and searches

• Dismissal

• Resignation

“Should I have a severance policy in the employee handbook?”

To retain the maximum flexibility in your company severance policy, we recommend that you do not formalize this policy in writing in the handbook. If you do not have a written severance policy, you will have more freedom to offer individualized packages to terminated employees that take into account the specific facts of the termination (see Chapter 9). If you publish a set policy in the handbook, such as “Employees terminated for reasons other than cause will receive two weeks’ severance for every year worked,” you may create legal problems should you pay a specific employee more or less than that amount.

“Are there any stylistic considerations in writing the handbook?”

Keep in mind that a diverse population of employees will be reading this manual. Write in clear and simple language so that all employees will be able to understand the intent of the information presented. Avoid ambiguity. Draft policies carefully so that they will be interpreted the way you mean them to be. Do not use excessively small print, and leave plenty of white space on each page, so that the material will be easy to read and won’t intimidate the reader.

Avoid words or phrases that commit you to act in a certain way in all instances, such as “will,”“must,” and “employee rights.” Instead, use words such as “may,”“can,” and “generally.” For example, in your internal complaint policy, instead of saying, “The human resources department will respond to complaints within five days,” you might say, “The human resources department will try to respond to complaints within five days.”

Use a positive tone throughout; do not adopt a punitive posture. As an example, consider the wording for a simple vacation policy:

In order to properly schedule vacation time and assure that the organization meets its staffing requirements, employees should submit their vacation requests at least thirty days in advance.

Now compare the previous example with the following wording:

Vacation requests not submitted at least thirty days in advance will be denied.

Both provide the same notice requirement, but which do you think employees would view more favorably? If possible, explain the reasoning behind certain policies, especially those that are likely to be seen as controversial.

“What legal issues do I need to look out for in creating the handbook?”

Many employers resist the notion of adding legal language to the employee handbook. Understandably, most organizations want an employee-friendly document, not a legal instrument that could alienate and frighten employees. However, in creating your handbook, the most important legal consideration is ensuring that your policy manual will not be interpreted as an employment contract or a guarantee that employees can remain employed as long as they follow the policies described in the handbook. For this reason, you will need to add legal disclaimers to the document.

Disclaimers should appear prominently within the handbook—in large and/or bold type—and they should be repeated several times if the handbook is particularly lengthy. Examples of possible disclaimer language are as follows:

This handbook is not intended to create an employment contract, express or implied, and in no way serves to modify the “at will” employment relationship between the employee and employer. Either party may choose to terminate the employment relationship at any time, with or without cause or notice. (This disclaimer emphasizes that nothing written in the handbook creates a guarantee of continued employment for the employee and that either the employer or the employee can end the employment relationship at will.)

This handbook is intended as a guide only and is not intended to be a complete description of the employer’s policies and procedures. (This allows the company to have policies and procedures that are unwritten—such as severance practices, as discussed previously—or in writing, but not contained in the handbook.)

This list is intended as an example only and is not intended to include all acts that could lead to employee disciplinary action. (This statement allows you to discipline or terminate an employee for a reason that is not specifically mentioned in your progressive disciplinary policy.)

This handbook supersedes all previous information concerning the subjects discussed herein, whether oral or written. The employer reserves the right to modify the policies and procedures contained herein at any time. (This disclaimer indicates that earlier versions of the policies contained in the handbook no longer apply and that the company is free to make changes to the information in the manual at its discretion.)

This handbook can only be changed in writing, by [the head of the organization]. (This disclaimer prevents employees from claiming that their supervisor, or other member of the company, authorized a deviation from the written policies and procedures.)

“Do I need to get an attorney involved in the process?”

Although you can save a considerable amount of money by drafting the handbook yourself, it is advisable to submit a draft to an attorney for review and fine-tuning before releasing it to employees. In this way, you can ensure that the policies comply with all applicable laws and that your disclaimers are adequate to protect you when the need arises.

“If we have facilities in more than one state, do we need multiple handbooks?”

Yes, you probably do. Although federal laws and your fundamental employment policies will remain constant no matter where you operate, individual states may have specific protections, notice requirements, or other laws that are particular to that state alone. Or you may have different policies across locations if, for example, one state houses corporate offices and another a warehouse or manufacturing site. While you can use the same basic handbook across the board, the handbook for each facility should include the individual variations required by law, or specific policies or procedures not applicable to all locations.

“Is there anything else I should consider as I’m writing an employee handbook?”

Remember that the handbook is intended to outline the organization’s significant policies and procedures, not to cover every situation that may arise in the course of the employment relationship. Focus on those issues that are most relevant to you as an employer, not situations that seldom, if ever, arise or apply to only a small group of employees. Address the document to the majority of well-intentioned employees who wish to understand and abide by the company’s policies, not the errant few who will inevitably violate them.

Do not duplicate details that are covered in other employee publications. For example, while you may want to include a brief statement of employee benefits and an outline of eligibility for coverage, there is no need to address at length information that is provided in the organization’s benefits information package. In these instances, the handbook should simply tell employees where they can obtain further information.

Avoid including information that is subject to frequent change, because this will quickly render a new handbook out of date. For example, a detailed description of the use of the company’s time clock system may require updating if you should purchase another model or type of system. It is advisable to omit these instructions from the handbook and post them elsewhere.

Because employees are likely to take the handbook home and show it to friends and family members, be careful not to include confidential information or other details that you would not want outsiders to know.

“How do I get employees to read, understand, and follow the policies in the handbook?”

If you have created your company’s first employee handbook, or if you have substantially revised an old one, you will want to take special care to properly present the new manual to employees. Initially, workers may feel overwhelmed when a volume of “rules” is handed to them. You can help to allay their concerns by taking a personal approach. Call a meeting for employees to introduce the handbook and allow individuals to ask questions about the policies. Explain that in general, the handbook does not constitute a change in policies, but merely serves to put into writing the policies, practices, and standards that the organization has always had. If the handbook includes any elements that do, in fact, constitute a change from past practices, consider including a summary sheet outlining any significant changes.

You need to notify employees that it is their duty to read and understand the policies contained in the handbook and that they are responsible for requesting assistance if they do not understand a particular policy provision. Distribute along with the handbook a Receipt of Handbook Acknowledgment Form that each employee should sign and return to the HR department or other person in charge of employee records. (A sample form is provided in the Tools and Templates at the end of this book.) The form states that the employee has received and read the handbook and agrees to abide by all the policies contained in it and to seek clarification from supervisors when needed. The form should also restate any important legal disclaimers. Keep the Receipt of Handbook Acknowledgment Form in each worker’s employment file. In the event there are any legal disputes surrounding the policies contained in the handbook, you will have proof that the handbook was distributed and that the employee acknowledged his or her understanding of employer standards and practices.

“Once I have created and distributed the handbook, is there anything else I should do going forward?”

It is critical to review the handbook periodically to ensure that it accurately reflects changing policies and practices of the organization, as well as changes in federal, state, or local laws. Establish a review procedure at the time you develop your handbook. The procedure should include:

• A time frame for review (preferably annually)

• The designation of the individual(s) responsible for conducting the review

• A method for notifying employees of any changes to the handbook

Notify employees of any changes either by issuing a revised version of the handbook or a periodic “supplement” to the existing manual. Have employees sign a new Receipt of Handbook Acknowledgment Form every time you issue a revised handbook or supplement.

“How about an electronic handbook?”

For most employees, your company intranet is the best place for the employee handbook and other relevant policies. It is easier to update than paper and is certainly more friendly to the environment. If you dispense with a paper handbook, you will need a system that records receipt and tracks employee acknowledgments. Don’t forget any employees who do not use computers on the job; have a paper handbook available for them.

You may also use the company intranet to publish policies and procedures to guide managers. You can restrict access to managers by building appropriate access levels into the system. Whatever format you choose, your handbook should reflect the quality of your organization. Handbooks need not be highly stylized, bound books, but they should not be faded, crooked photocopies or electronic documents that are difficult to navigate. With the range of electronic and publishing resources available today, you can create a document that is professional and represents your own style.