Over the years, as I consulted with small businesses, I was often asked if an employee handbook was necessary. The questions usually amounted to:
– the cost of having an employee handbook written,
– the number of employees (I only have one employee),
– the idea that having written policies would cause more problems than not having written policies, and
– I tell the employee everything they need to know and if they have a question they can come and ask me.
Handbooks are not required as a regulation or law. However, some laws and regulations require posting in the place of business – for example Minimum Wage. The way handbooks are written could be a deterrent, i.e. if it is too legal no one will read it or care to read it and it then is a waste of time. If it is too simple, it gives the impression of “fluff” and is not taken seriously and is then a waste of time.
I tell clients that Handbooks are a guide for both the company and the employees. It helps define the way the organization does business and how they treat one another. It gives the employee a sense of fairness and consistency because it says that everyone is treated the same way. It tells the court (if there is litigation) that policies are in place and they are followed.
Does it matter how big or how small the company is? If you only have one employee, you probably don’t need a full blown handbook. That being said, however, as you start growing your business and you hire your first employee, you start to develop policies – sometimes without even realizing it. So, having a simple handbook from the very beginning helps keep you focused and consistent.
For example, you have one employee and that employee seems to always have a question. “What are our holidays?” “When do I get paid?” “Do I get vacation or sick time?” “Do I have to wear a uniform or can I wear jeans?” “Mr. Smith made a pass at me, what should I do?”
These questions may not come all at the same time but over a period of time. Your answer becomes the policy of the company and as you add more employees, you need to give them the same information you gave your first employee. Sometimes it is hard for me to remember what I did last week, much less having to remember what I told an employee three months ago. That is why a handbook is helpful.
Another reason is that employees are going to learn what is accepted and what is not within the company whether you have a handbook or not. You have to determine how you want them to learn about the company. Do they learn from a disgruntled employee, an irate customer, an easy going supervisor, or do they learn from the written policy that you have put in place?
Remember, however, if you have a policy you must follow it. Do not put policies in your handbook that you cannot or will not follow. You should review your handbook on a regular basis and you have the right and obligation to up-date the handbook to comply with state and federal laws and to address issues as they arise.
Finally, the cost is minimal compared to what a lawsuit might be. Handbooks help minimize the liability associated with having employees as it indicates consistent management styles, fairness to all employees, and compliance with the laws.
If you have a handbook, good for you! If you don’t, you might want to look at putting a simple handbook together.