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Small Business Tips

How to Write a Great Employee Handbook

Manasa Reddigari

What sets apart an inefficient business from one that runs like a well-oiled machine? Sometimes, it's the mere presence of an employee handbook in the latter and the lack thereof in the former that differentiates the two.

By all means, continue reading to learn what an employee handbook is and what goes into an effective one.

What's an employee handbook?

An employee handbook is a living document that lays out the history, values, policies and procedures of a workplace and its workforce. It governs everything from workplace conditions and operations to the legal rights, employee benefits and proper conduct of employers and employees.

The overarching goal of an employee handbook is to maintain a safe and productive working environment for both the employer and employee. It also lays out the expectation for both parties.

Why should I have an employee handbook?

Just as a society can't enforce laws if it doesn't have any on the books, a small business without an employee handbook will have difficulty upholding a set of norms and values.

From an employer's perspective, an exhaustive employee handbook makes it straightforward to inform an employee of any of the following.

  • Benefits packages
  • Promotion policy
  • Rules of conduct
  • Workplace safety to prevent lawsuits
  • Rules for discrimination, harassment and employee termination

For an employee, the handbook can reassure him of the compensation and benefits to which he is entitled. And provide him with steps for recourse if his rights are violated. It can also act as a treasure trove of valuable business information. To illustrate, weather-related business closure policies, holidays, appropriate dress code and company contact information.

All in all, the employee handbook allows the employer to establish a relationship of transparency and trust with an employee. Accordingly, this allows the business at large to operate more smoothly and efficiently.

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6 tips to writing a great employee handbook

Below are some guidelines for how to write an effective employee handbook:

1. Be welcoming

Don't dive into the policies and procedures before first extending a welcome to new employees. A greeting from a higher-up in the business (e.g., the owner) is recommended. Then, lay out the company mission statement, values, vision and overarching goals.

2. Put safety first

Reassure employees that their safety and security is the utmost importance. For instance, transitioning from the welcome statement into policies on workplace safety and security protocols.

3. Establish clear conduct guidelines

This is perhaps the most important section because you need to strike a balance between being too lax and too regimented. Set forth guidelines for attendance, working hours, personal behavior and termination policies. The intent is to discourage unacceptable conduct but still grant employees a high degree of autonomy.

4. Mention the benefits

Be detailed as possible about compensation and benefit plans, including retirement plans, stock plans, insurance and PTO. If certain benefits are dependent on seniority, it's helpful to include a table indicating the relevant benefits for each level of seniority.

5. Get the legal terms right

It's prudent to have the whole employee handbook looked over by a lawyer. This review ensures that any policies you set forth are compliant with the law. Moreover, the section where you lay out terms of employment, including employment status (full time, part time, etc.) and any agreements by which an employee must abide as a condition of employment (e.g., non-disclosure, non-compete, etc.)

6. Seek input

Regard your employee handbook as a living document. As your workforce grows, solicit feedback from other employees not only about what type of information you include in the handbook but also whether certain policies need to be revisited and revised. For employees, this strategy reinforces the notion that you want to establish a work environment that is mutually beneficial to both employer and employee.

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