An employee handbook is a manual that contains an employer's
work rules and policies. It can also contain other information
that is useful to the employee, such as the business's history,
its goals, and its commitment to customer service.
Why have employee handbooks? For a small business,
this question is hard to answer. Whether to have a handbook
should depend largely on the size of your business. If you have
only a handful of employees, the time it would take to assemble
a handbook probably won't be worth it. However, you may
still want to have some kind of written document to communicate
work policies to employees — perhaps a one-page document
would be sufficient.
If you have 10 or more employees, you might want to put a
simple handbook together. Some employers feel that handbooks can
pass on valuable information to your employees, such as:
- what you expect of them and what they can expect of you
- what your business's service policy to customers is
- what place your business has in the community and the
- what makes your business a good place to work
While handbooks can be a positive, helpful
resource for your employees and for you, there
is a real danger of creating
an employment contract with your handbook
that makes it difficult to terminate employees
and can even make you liable to them if you need
to change any of the rules, employee benefits,
or working conditions mentioned in the handbook.
Be sure your lawyer reviews your handbook
before you give it to employees.
Other uses for employee handbooks. If you're undecided
about whether to invest the time in creating a handbook,
consider some of the other uses for a handbook in addition to
communicating important information to employees. Provided the
is there, the handbook can serve a number of purposes:
- A motivator. A handbook can give employees a sense
of being a part of something larger. If your handbook
includes information about the business's history and goals,
it can provide a positive motivation
for keeping employees excited about their jobs and involved
in the company's success.
- A reference. With a handbook, everyone knows the
rules of your workplace. When an employee breaks a rule, you
can refer to the handbook. It helps make enforcement and discipline
- Your shield from charges of discrimination or
unfair treatment. If discrimination or unemployment
claims are brought against your business, your handbook
can provide persuasive evidence that you had clear,
reasonable rules against certain conduct which were
communicated to employees and fairly enforced.
John Fisher, an employee of the ABC Tools
Company, is witnessed placing expensive company
tools into his car in the company's parking lot
and is therefore terminated. John proceeds to
file a charge of discrimination against ABC
Tools with the Equal Employment Opportunity
Commission (EEOC). He claims that he was just
borrowing the tools and did not know that such
action was grounds for discharge.
But once ABC Tools receives notice of the
charge, it sends the EEOC a copy of the employee
handbook — highlighting the following rule
under dischargeable offenses:
"removal of tools or equipment without
express permission from a supervisor"
Consequently, the EEOC quickly concludes that
the discharge was not discriminatory.