A carefully written handbook for your employees can improve morale, prevent disagreements, and even keep you out of court.
Some executives prefer to make policy decisions on the basis of personal hunches, likes and dislikes, or just plain delight in running the show. They don't want to delegate authority in hiring and firing, or rewarding and punishing employees.
But that's a risky and time-consuming way of managing personnel. Eventually every executive finds that his life would be a lot easier -- and his employees a lot happier -- if the policies he is constantly being called on to make were written down.
Any company with more than 20 employees, and some with as few as half a dozen, should issue a policy handbook. It should answer some of the most important questions employees ask -- questions about salary review, holidays, benefit programs, leaves of absence, and other critical policies that often affect morale and whose absence can create legal problems. The handbook should have two goals: It should keep all employees informed about company regulations and changing policies, and it should give supervisors the support they need when they have to enforce those regulations and policies.
Your lawyer, or a legal expert in the field of labor relations, is the best person to consult before you issue a policy statement to employees. (Remember, a policy handbook may be considered legally binding in the event of a dispute or an unfair employment practice claim.) On the following pages we've outlined some of the major items that should be included in a personnel policy handbook along with some dos and don'ts to consider when you're drafting or revising yours.
Policy item What it should say Problems to avoid
Equal opportunity State that an Don't include the
employee's religion, Affirmative Action
age, sex, national Plan, if you're
statement origin, race, or required to have
color will have nothing one, in this section.
to do with hiring, Refer instead to a
promotion, pay, separate handbook.
or benefits.
Physical Establish your Be sure your
right to conduct both decisions to conduct
pre- and post- a physical are
examinations employment physical nondiscriminatory --
exams, at i.e., don't just
company expense. examine older
people or minorities.
Probationary period Define the period Avoid a great
(usually 30, 60, or discrepancy between
90 days) during the probationary
which a new period and the
employee can be period before an
dismissed without a employee qualifies for
hearing on the group insurance.
cause; also indicate
when benefits start
to accrue.
Hiring of relatives State whether you Too strict policies
will allow a married -- e.g., requiring two
couple or close employees who
relatives to work get married to
together in the same choose which will
department. remain with the
company -- are
bad for morale.
Work hours Define the workweek Provide yourself
and time allotted with the option of
for lunch and rescheduling
breaks. Indicate individual hours of
the cut-off time for work in any given
each pay period. week at the
discretion of the
supervisor.
Employee status Define the nature Be specific to
of each type of avoid any chance
employee -- full time, of misconception.
part time, temporary,
and "exempt" and
"nonexempt."
Make clear
what benefits
each is eligible for.
Overtime pay Establish clearly Don't say that you
whether overtime is are bound to assign
paid for work over overtime on the
40 hours a week basis of seniority.
or over 8 hours in
a given day, and
how much is paid
for work on a holiday.
Make it clear
that pay for
overtime must be
approved by a
supervisor.
Pay reduction for The usual policy Using too large a
is to go by the clock, unit, such as a quarter
i.e., to dock an of an hour,
lateness employee's pay in may cause problems.
units of six minutes It may be illegal
or tenths of an to dock an
hour. employee's pay by
that much if he or
she is only a few
minutes late.
Severance pay Determine this on Unless state law
the basis of seniority, requires it, you don't
e.g., a week's have to pay for
pay for less than accrued vacation
three years tenure, time.
two weeks for up
to six years, etc.
Exclude employees
who are released
for "cause." You
may also exclude
those who leave
voluntarily.
Performance Review wages either This policy is essential
on the anniversary -- some employees
of would rather
review and merit employment or quit than ask for a
during a set annual raise. Don't commit
or semiannual yourself to
cost-of-living
increases period. increases
unless required by
a union contract.
Make all raises
based on merit.
Time clock or sign-in Rules should prohibit You must keep
employees from some sort of record of
recording hours worked by
systems another's time, "nonexempt" employees.
causing another Early sign-ins
employee to record or late sign-outs
for him or her, or will make you
failing to record his liable for overtime
or her time. They pay in case of a
should also forbid conflict or dispute.
signing in too soon
or out too late
without authorization.
