Why You Need an Employee Handbook and What It Should Cover

A staff handbook (also known as a Policies and Procedures Manual) is something every company, regardless of size, should have.

It is especially useful at onboarding, informing your new employees what is expected of them – and what they can expect from you – in terms of behavior, treatment and workload. It is a clear introduction to your workplace culture and it will guide employees through the processes of requesting leave, appraisals, health and safety, etc.

A handbook also creates a level playing field among the employees themselves. Written policies demonstrate to everyone  they are being treated fairly and equally. When you consider that unfair treatment is the underlying cause of many employee legal actions, holding everyone to the same standards and practices is crucial.

The policies and procedures within your employee handbook can help you when faced with employee disputes or having to defend yourself or your business against legal claims. A handbook provides a reference for managers to follow when it comes to making decisions regarding employment, conduct or disciplinary action. It is also a reference for the employees to understand the entitlements they have and the obligations you must meet as an employer. Employees should be required to sign their acknowledgement of having received and read the handbook, avoiding any room for doubt or future denial.

This may sound overly cautious or “going through the motions,” but imagine not having such measures in place. Where does it say that an employee has to be in on time every day? How should an employee know that it’s not OK to take office equipment home? Or that they can?

Handbook as a preventative

However, the biggest benefit of an employee handbook is undoubtedly the fact that it mitigates the risk of employee misconduct and discontent. Prevention is better than cure, after all, and the intention of equality that is laid out in an employee handbook goes a long way to building trust and morale.

Ultimately, a good employee handbook should also act as an advertisement for the benefits you offer to retain your best talent, whether that’s practical benefits such as healthcare, or cultural benefits like your company values.

Handbook vs. employment contract

A main reason to separate the handbook out from an employee agreement is to show that the same information applies to all employees (whereas an employment contract only binds the individual employee for whom it was written/signed by). By separating the contract and the handbook, you cover more than just the legal rights and obligations of employees that are contained in their contract (an employee handbook will include lots of recommended and suggested behaviors and practices that may not be as enforceable by law).

You also gain more flexibility in updating the employee handbook if it is a separate document to the employee contract.

It would be helpful for your employment contract to contain a phrase such as, “The employee agrees to comply with all current and future policies of the employer” as well as detailing a clause in the employee handbook that will allow you to make changes to any of the policies and procedures in the future and incorporate these into the employee’s agreement without their sign off.

However, your best practice would encourage employers to consult meaningfully with employees and/or their representatives when introducing new policies or amending longstanding policies which have an impact on the work, benefits or environment of the employees. Ultimately, in most companies, the decision on a policy or procedure is up to the employer and the framework outlined above allows you to make changes.

What your employee handbook should cover

As stated, an employee handbook allows you to cover the bases of essential, legally-binding information as well as more general workplace guidelines. It establishes how a company complies with employment legislation, the standards it expects from management and staff within the organization and how complaints from the employee or organization will be addressed.

Vital policies that you need as a business (regardless of your size) and should therefore incorporate into your employee handbook include:

  • Your recruitment and selection process
  • Equal opportunities policy
  • A dignity at work policy which covers issues like bullying and harassment
  • Procedures for discipline and grievance issues (including gross misconduct)
  • Rules around unauthoriszed absences
  • A “Code of Conduct” i.e. the more general rules / guidelines specific to your business

Other essentials that can be detailed in your employee handbook, but which may be modified in individual cases by an employment contract, include:

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  • Annual leave, including public holidays and any policies for time in lieu
  • Sickness reporting, pay rates and long-term absence procedures
  • Statutory flexible working arrangements
  • Salary / pay and pension information
  • Statutory retirement rules

In addition to the must-haves, are policies that it is highly advisable to include within your employee handbook. Though some relate to issues or situations that you may feel are highly unlikely to affect you, the fact remains that it is better to have them there just in case:

  • A capability and performance policy, including any appraisal procedures
  • Training policy for learning and development
  • Redundancy policy
  • Diversity policy
  • Financial procedures such as claiming work expenses
  • Whistle blower guidelines
  • Digital policies around internet use, mobile phones and social media
  • Data protection policies
  • Special leave such as bereavement, jury duty, etc.
  • Career break policy
  • Risk management
  • Volunteering
  • Child or vulnerable adult protection (if appropriate)

If you have a board, it is advisable to include a section on its responsibility, the composition of the board and how new trustees are selected, including conflicts of interest and role profiles.

Note that in the US the National Labor Relations Board takes a dim view of overly broad policies. See “39 Reasons Why Your Employee Handbook May Violate the Law.”

Defining a good policy

An employee handbook is not merely a weapon of protection to guard your business. The handbook should equally communicate your intention to protect your employees, as well as yourself, from any negative or unethical behaviors.

There should be positive messaging at the center of your policies that embodies your business ethos. That is why an employee handbook is a great place to introduce new (and remind existing) employees of your organization’s culture, mission and corporate values.

A well-written policy needs to have a solid purpose and link clearly to your business strategy. It should be written in plain English, free from industry jargon or “management-speak.” This will ensure it is easily understood by employees and avoids any room for dispute.

Good policies are also flexible, allowing you to adapt them to changes within or outside your business. They should be developed with involvement from your existing team of employees and any other interested stakeholders such as employee representatives, ensuring they fit with the culture of your business.

Last, but by no means least, a good policy will be communicated succinctly out to all those for whom it applies (even the best written policy is a bad one if it’s left to languish in a drawer). Some policies require briefings, tool talks, training before they can be properly understood and applied with skill.

Hiring staff is a big responsibility. You’re asking people to join in the movement of building and growing your business, while you promise to look out for their wellbeing and provide a salary and benefits. So, it’s crucial that you approach recruitment and retention of employees correctly.

Jerome Forde is a HR and employee relations specialist with almost 30 years’ senior-level experience in complex public, private and not-for-profit organizations. Jerome founded FordeCloud, a HRIT platform that uses the most advanced cloud technology to bring a virtual HR office to start-ups and SMEs.

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