8 Reasons You Should Have a Company Employee Handbook

If you ever question the purpose of an employee handbook, think again. They are an essential tool for HR leaders and it’s not just about setting policy and staying compliant. The best employee handbooks offer a reminder of a company’s vision and purpose and help employees throughout their tenure.

Here’s everything you need to know about why and how to create an employee handbook for your organization.

What is an Employee Handbook?

The handbook gives employees a detailed overview of policies that are specific to your organization along with other key procedures, guidelines and benefits. In a nutshell, it sets clear expectations for your employees while also stating your legal obligations and defining employee rights. The employee handbook can help protect your business against employee lawsuits and claims, such as wrongful termination, harassment and discrimination. The handbook is also a crucial introduction to your business for new hires, providing insights new hires understand your mission and values.

Creating an employee handbook from scratch can seem like a daunting task, but having one is essential to creating transparency and consistency across your organization. It can also keep you out of hot water. Still on the fence? Here are eight reasons your organization should have one:

Introduces employees to your culture, mission and values

Perhaps the most important aspect of your employee handbook is the introduction of new employees to your corporate culture and how they will fit in. This helps to foster a sense of pride and belonging, which studies show will help employees become more productive in a shorter period of time. The introduction section of an employee handbook will answer these questions:

“What do we do that sets us apart?”
“How did the company get here?”
“What are we passionate about?”
“How can I, as a new hire, become a part of this culture?”

The introduction section sets the standard for the employment relationship in general, and provides a guidepost for the remaining policies communicated in the handbook.

Communicates to employees what is expected of them

A well-written handbook provides employees with a clear understanding of their responsibilities. The handbook also serves as a compass for the organization’s policies and procedures. For example, it advises employees what the procedures are for requesting time off or a vacation. It advises employees whom they should contact when they have an unscheduled absence (and what the timing should be). It tells employees whom to go to if they have questions about any of the specific policies in the handbook.

The handbook also communicates an employee’s general responsibilities regarding safety, timekeeping and reporting. By providing clear, accessible information, handbooks ensure companies continue moving in the right direction.

Educates employees about what they can expect from management and leadership

An employee handbook provides objectives and leadership styles, as well as management best practices, to foster healthy management-employee relationships. It also outlines logistics, such as timekeeping requirements, hours of work and pay periods. Further, a complete employee handbook advises employees of their various entitlements to federal and state leaves, such as the Family Medical Leave Act (FMLA) or Jury Service Leave. These clearly communicated policies help to eliminate confusion and inconsistencies that result when handbooks are silent on these topics.

Helps ensure key company policies are clearly and consistently communicated

No policy is effective if it is practiced inconsistently. A handbook will accurately communicate your organization’s policies regarding employment, conduct and behavior, compensation and other policies and procedures you follow. Most importantly, managers can refer to the handbook when answering questions or making decisions regarding your policies and ensure their answers and actions are consistent with your policies and best practices.

Showcases the benefits you offer

Does your organization offer vacations, 401(k), health insurance, paid parental leave or other benefits to employees? Make sure they know about these policies and the eligibility requirements by communicating them in the handbook. A robust benefits package can help you retain your best and brightest employees, so be sure they know about your full suite of offerings by communicating these in the handbook.

Ensures compliance with federal and state laws

No matter what state you do business in, or how many employees you have, you will be subject to state and federal employment laws. Your handbook not only communicates these various entitlements and obligations to employees but is useful in demonstrating that your organization strives to be compliant with these regulations. For example, if your employee is called away to active-duty military service, you will want to be sure they understand their rights and obligations when communicating their reason for taking leave. Your Military Leave Policy should clearly define these parameters to the employee. Similar policies should communicate rights and obligations regarding state disability leaves, federal FMLA leave, and other government mandates.

Helps defend against employee claims

Unfortunately, employers should consider it a matter of when, and not if, they will face a lawsuit or similar challenge from a current or former employee. When this happens, one of the most useful documents you can provide your attorney or third-party investigator will be a copy of your handbook. A thorough and compliant employee handbook will help to show that the organization exercised “reasonable care” towards its employees. The employee’s signed acknowledgement page will show that the employee had an opportunity to familiarize themselves with the organization’s policies, a chance to ask related questions, knew whom they could turn to for help within the organization, and agreed to follow the terms and conditions of employment set forth by the organization.

Where employees can turn for help

Ultimately, you want employees to feel comfortable turning to a trusted member of management for help when they want to report workplace violations, obtain workplace-related assistance and get answers to any other questions they may have. The alternative is for them to turn to an outside third party, like the EEOC or DOL, which could trigger a costly and time-consuming investigation. When a handbook not only outlines one or two management individuals for an employee to turn to in these situations, but also designates another individual to turn to in the event the employee disagrees with the first decision, they are more likely to keep their complaints in-house, and this is a good thing for employers.

When was the last time you reviewed your policies and updated your employee handbook? Or do you need help creating one but aren't sure where to start? Searching for the answers you need online is time-consuming and inefficient. Plus, can you really ensure the information is accurate?