The Importance of an Employee Handbook

June 22, 20150 Comments
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The importance of an employee handbook that clearly sets out your business policies and procedures cannot be overstated. Although it is not a legal obligation for businesses to have a staff handbook, having one can help to dramatically improve the overall strategy for corporate governance in any type of business. A clear and concise employee handbook can help to settle workplace disputes before they begin and protect both yourself and your employees from unnecessary conflict and the potential of litigation. It also serves to inform your employees of what is expected of them and gives them an idea of what is and is not considered acceptable behaviour.

An employee handbook should be provided to employees during the induction process and should include job-related employment information covering workplace ethics, health and safety guidelines, employee privacy, staff recruitment and customer service standards. The handbook should also include provisions for holiday arrangements, company rules, payroll information, disciplinary and grievance procedures, industry regulations and any other laws with which the business must comply. It can help improve employee morale by demonstrating that you are interested in fair and consistent communication for your employees, and it can also be used to bring new employees up to speed more quickly.

The policies and working practices that are set out in the employee handbook are more beneficial and useful when they are applied as guidelines rather than as rules and regulations that must be adhered to. It’s important to avoid complex and convoluted policies and to minimise the use of legalese within the handbook, as employees who become frustrated with the amount of information and with convoluted policies are unlikely to read it.

How a Handbook Will Protect You

In the event of an employee taking legal action against your company, an employee handbook could prove to be a very useful tool in your defence. Although a staff handbook does not prevent the business from being sued, it can instead be used as a form of documented evidence. For example: If the handbook explains how overtime is calculated and your employees have acknowledged receipt of the handbook, then this could protect the business should it be accused of not paying the correct amount of overtime.

In order to provide the maximum amount of legal protection to the business, the employee handbook should be regularly updated in order to comply with the latest employment laws, as certain sections may become irrelevant and others need further clarification as rules and regulations are amended. It is therefore important that the handbook is reviewed annually and updated accordingly. It is also good practice to ask employees to acknowledge receipt of the handbook in the form of a signed document, which will also help protect the company in the case of a legal dispute.

How to Update Company Policies

There are numerous reasons why company policies may need to be reviewed and updated, such as company growth or a change in the direction or organisational structure of the business. By having a clear and concise procedure for reviewing and, if necessary, updating the employee handbook, a company can minimise the amount of time it takes to implement such changes. Some useful tips for updating an employee handbook include:

Identify the right person for the job: Ideally, the best person to oversee this task would be an HR manager, but it is equally important to record the views of all members of departments, as the policies outlined in the handbook can affect the various levels of staff in different ways.

Gather information: Research within the company to determine the need for the new policy and decide how important it is. Discussing similar policies with other companies can be useful to find out how it was implemented.

Keep the new policy simple: The language used should be simple and easy to follow and understand. Underlining the business objectives and also the benefits of the policy change and how it will be implicated among the team can help to encourage employee adoption.

Add the policy to the employee handbook: Effective use of illustrations to explain exactly what the new policy does and why it has been added can be useful. A cover letter should be included to explain why the changes were made.

Present the new policy to all employees: A meeting should be arranged so that the new policy can be discussed. By taking the time to go through and explain the change and answer any questions employees may raise, you are more likely to identify any misleading information or loopholes in the policy which may need to be amended.

The importance of an up-to-date employee handbook cannot be over-emphasised. Employees must understand the rules of their working environment and the basis and justification for these rules (policy), as well as what they and others are expected to do (procedures). An employee handbook is an extremely important tool that helps directors and senior management run a company smoothly and efficiently.

Founded in 2002, Compliance Week is the leading online source of news and information relating to corporate governance, risk and compliance. Compliance Week features weekly electronic newsletters, a monthly print magazine, proprietary databases, industry-leading events and a variety of interactive features and forums. Our mission is to help our subscribers comprehend and comply with the constantly evolving global regulations and standards to which public companies must adhere, and our focus is on critical regulatory and compliance issues related to financial reporting, regulatory enforcement, corporate governance, enterprise risk management, and related global issues.

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