Take a Fresh Look at Your Employee Manual
03/05/07
A cautionary tale: A company had an employee manual that proved useful until it came time to discipline a worker. That’s because the manual outlined a disciplinary policy that kept it from firing the employee on the spot for a severe infraction. When the incident ended, it recalled all handbooks to fix the policy.
But the CEO never got around to it. He didn’t want his hands tied again, and he figured it was easier to do what he wanted to without a manual.
It’s bad enough having a policy manual that fails you when you need it. But having no manual at all is even worse, according to HR consultant Edward Kaplan of Personnel Dynamics in High-land Park, Illinois. “If a company doesn’t have an employee manual,” he says, “its practices become the rules and policies that it has to follow. If it is not consistent in following them—which is likely —it could be liable for discrimination or charges of unfair practices.”
You Need an Effective Manual
Having an employee manual is essential. It defines the organization’s policies and expectations for employees clearly, and it defines what employees can expect from the company. It protects the company legally. “A well-drafted handbook,” notes Kaplan, “educates employees, sets organizational tone, and outlines employment-related rules and practices.”
Having a well-written manual, in fact, makes it easier to manage. Kaplan: “If policies and rules are clear, managers don’t have to rely on memory or search for precedents in other departments. They also spend less time explaining things to employees.”
But while most companies have a manual, few are as effective as they could be. As the lead story shows, some even contain policies that fail you when you need them most. Read on for ideas you can use to make your handbook better.
First: Hire a Pro
You could write an employee handbook yourself, but it’s a time-consuming task. Also, it’s easy to create problems for yourself by, among other things, making inconsistent statements or using discriminatory language inadvertently.
An HR consultant who specializes in handbooks can help you avoid such problems and cover all legal bases. And he or she will tailor the manual to your company’s culture and practices.
Kaplan, for example, spends up to a full day meeting with company managers before writing a manual. They discuss:
Current policies and practices and how they came to be important.
How proposed policies will be applied.
Exceptions to policies and reasons for them.
Alternatives to policies.
Integrating policies and maintaining consistency among them.
Implications of state and federal laws.
This is the value added you wouldn’t get, for instance, if you used a computer program to assemble a manual—although such a program might be a good start for a small company or when used in conjunction with a consultant.
Should you hire an employment attorney to do the job? Says Kaplan, “In my experience, many attorneys write a policy manual more as a rulebook than as a tool a company can use to foster positive employee relations. Their goal is to eliminate risk to the employer.”
Eliminating risk is no sin, of course, which is why G. Neil corporate attorney Wendy Smith advises you to have an attorney read and approve a manual no matter who writes it.
Project a Friendly Tone
Make sure the tone of your manual is positive, and not threatening. Remember, it will be among the first communications you’ll have with a new employee. You want to make a good impression and get your relationship off to a good start.
“The author should write to, not at, employees,” adds Kaplan, “eliminating formal language and long sentences. And he should write from the employee’s point of view, using ‘you.’” Example: “Here at ABC you will receive paid vacation after you’re here six months. Please request vacation time as far ahead as possible so both you and the company can make appropriate plans.”
How do you make harassment or discrimination policies sound friendly? It’s difficult, admits Kaplan. He always includes a statement that says:
Portions of the handbook may seem formal and out of keeping with our informal atmosphere and style. This is because of our desire to be concise and comply with certain legal guidelines.
What to Include
The list to the right outlines the contents of a typical employee manual. Pick and choose among those that apply to your situation.
Just be sure to include all policies you mean to enforce. Says Kaplan, “Policies that come out of the closet when the situation arises are immediately suspect by employees if the ruling is against them.”
A few policies merit special mention:
Sexual harassment, discrimination, and equal employee opportunity policies. “I put these at the front of the book for two reasons,” says Kaplan. “First, if you do an orientation, you’re likely to cover these very important policies before employees zone out. Second, some courts have held that policies buried deep in handbooks must not be considered all that important by the company. That’s another good reason to put them up front.”
Employment at-will policy. Essential, according to G. Neil’s Smith, who would word it something like this:
You have the right to terminate your employment at any time and for any or no reason. The company likewise has the right to terminate your employment for any or no reason. No one other than [name of CEO] has the authority to alter the at-will nature of any person’s employment or to enter into a contract of employment with an employee.
Having an at-will policy is a useful way to turn marginal performers loose and make way for those who can help you grow.
But Kaplan makes sure his clients know that, at-will policy or not, you must terminate employees legally. “I also tell them that this policy does not give them license to act capriciously or impulsively. Coaching and counseling should be used when possible.”
Discipline policy. In Kaplan’s view, it’s important to avoid having a “stepped” progressive discipline policy. (Such policies say, for instance, that a first offense will result in an oral warning, a second offense in a written warning, and so on.) It will, he believes, conflict with an employment-at-will policy.
A paragraph he uses often may suffice:
While we hope and expect the need for disciplinary action will be rare, when your job performance, attitude, or conduct fall short of our standards, we will not hesitate to take appropriate action. Such action may range from verbal or written warnings to termination. Some types of misconduct are so intolerable that suspension or termination may be imposed for the first offense.
Others believe a progressive discipline policy can coexist with an at-will policy, as long as you include language that says the steps may be bypassed at any time. Your employment attorney can help you decide what is best for you.
Orient and Train
Whenever you issue a new manual or bring someone new on board, provide an orientation session to go over the main points of the manual. While you don’t have to cover everything, be sure to discuss your harassment and discrimination policies and be ready to answer any questions about them.
Kaplan also advises separate sessions for supervisors and managers. “I hold classes to acquaint them with the handbook, underscore the importance of following the rules consistently, and highlight the key policies.”
Further, he says, “I tell supervisors they shouldn’t interpret the handbook. When asked a factual question, they should answer it, assuming they are confident enough to do so. If the question makes them uncomfortable, or requires interpretation, I want higher management to make the decision or interpret the policy.”