The employee handbook is a valuable tool because it helps employers to be consistent and it allows employees to avoid the embarassment of asking about various policies. This post explains the basic principles that need to be covered in an employee or staff handbook and how to access our free employee handbook template.
Do your employees understand the rules of the road?
As a business owner, you need to explain your company policies and procedures to your staff. Your team members need to know what is expected of them, and what they can expect from you. If you handle these expectations properly, you can avoid misunderstandings and limit any potential legal liability.
The best way to explain the rules of the road is to create an employee handbook, which documents your company’s policies, procedures, and expectations. This discussion explains why a handbook is important, how to start writing the document, and what your employee handbook should include.
Why It’s Important
Is writing an employee handbook really that important?
If you communicate frequently with your staff, and your workers perform well and seem to be content, you may decide that writing a handbook isn’t necessary. After all, creating a handbook is time-consuming.
Operating your company without that handbook, however, is a mistake. Here are some of the benefits you’ll gain by writing an employee handbook:
- Vision and Mission: Your handbook should include your firm’s mission statement, which is your description of where you are headed as a company. If your staff understands your mission statement, they may feel a stronger bond to your company, and be more passionate about the work.
- Supervision: The handbook makes employee supervision more transparent because the handbook explains the rights and responsibilities of both the worker and the employer. Everyone in the organization can refer to the handbook to make informed decisions about workplace behavior.
- Productivity: If you discuss the employee handbook with each new hire, you’ll speed up the onboarding process, and help new employees to work productively. When you provide clear guidelines using a handbook, your new staff members will start work with more confidence.
- Discipline: Many business owners dread the prospect of confronting an employee who makes a serious mistake. To minimize confusion on both sides, you should clearly state your disciplinary procedures in the handbook. Disciplining a worker is stressful, but implementing the procedures stated in the manual will make the process less difficult for both parties.
The handbook should also explain the benefits you offer employees, which can be a powerful incentive to retain workers over time. A handbook helps your business comply with federal, state, and local laws and should provide a confidential system that workers can access if they believe a policy or law has been violated.
Perhaps most important, operating with an employee handbook may reduce your legal liability. If you consistently follow the policies and procedures stated in the manual, each employee will be managed using the same set of rules. This practice can reduce your legal exposure if a worker brings a legal action against you. Consult with your attorney on these issues.
How to Start
Once you understand why an employee handbook is important, how do you start the writing process?
Most business owners create company policies as they run the business. You may, for example, have a process workers use to request time off. You’ve emailed a memo that explains the policy, but the information is not in a formal employee handbook.
You’re not starting the writing process at zero, because you’ve already created some policies.
Here are some steps that you can take to start the writing process:
- Google search: Perform a Google search to find an employee handbook template that applies to your industry. If you Google “employee handbook restaurant”, for example, you’ll find templates for restaurant owners. The template that you find can help you understand what topics to include.
- Outline: Once you find a template, outline your employee handbook topics, using the template and your own management experience. For example, a restaurant owner must manage a large number of workers and deal with employee turnover, so the employee handbook must focus on hiring and termination policies.
- Clear language: After you outline the handbook and start writing, use clear and simple language. Avoid using jargon, so that your staff can understand your policies, and provide links to more complex topics, such as laws and regulations. While a clearly written handbook will minimize questions, encourage your employees to ask questions if a policy isn’t clear to them.
You should meet with each new worker, either in person or online, to discuss the employee handbook, and each new worker should sign an acknowledgment that they received a handbook. This documentation will help to protect your firm if you must terminate an employee for violating a policy in the handbook.
Make sure that the employee handbook can be easily accessed online, and update the handbook as policies change.
What to Include
Your firm’s employee handbook is a reflection of the type of business you want to operate, so take the writing process seriously. The handbook sets the tone that you want to establish with your staff, and a well-written handbook makes the supervision process much easier for you and your employees.
Here are some important considerations for your handbook:
- Safety: Worker safety is your first priority, so begin your handbook by explaining how your firm will deal with an employee injury, a crime (robbery), or a natural disaster (flood, fire). Each of these events is stressful, and your workers should understand how your company would address these types of issues.
- Expectations: The handbook is your opportunity is set expectations, and you should include all relevant policies. For example, what’s your policy regarding cell phone use during work hours? Where should employees take their lunch break? State your policies in writing.
- Attorney review: Your handbook must address a variety of employment and legal policies, including overtime pay, workplace harassment policies, and other issues. An employment attorney should review your manual, to ensure that you’ve complied with federal, state, and local laws and regulations.
As you grow your business and hire more workers, you’ll need to add to and change your employee handbook. Remind your staff that an updated version of the handbook can always be found online.
Make the commitment to create an employee handbook sooner, rather than later. Your handbook will make it easier to manage your staff, and the document will reduce your potential legal liability. Make the effort- you got this!
Nordstrom’s unexpected gift to aspiring tech leaders
Back in 2012 I took a class on organizational culture at the Berkeley Haas School of Business. At the time I was a self-taught, rough-edged manager looking for any guideposts on the very difficult path toward becoming a leader. It was in this class that I first began to understand organizational culture, not as something that was emergent from the activities of a team, but as something that could be shaped intentionally with purpose.
The professor defined culture as, “a system of shared values, norms, beliefs, expectations and assumptions held by members that distinguishes an organization from others.” That’s an academic-sounding and much less creepy way of saying every company is its own cult, with its own leaders, heroes, language, rewards, ceremonies, artifacts, and kool-aid used to reinforce desired behaviors.
During class, we talked through examples from many companies: Microsoft, Netflix, Cisco, Google, Uber, and more. We learned that you can’t always judge a culture comparatively (e.g. is Microsoft culture better than Amazon’s or Netflix’s or Uber’s) but we can ask whether a culture is well aligned to the goals of an organization and how it compares with society as a whole. One company and one singular artifact hooked my attention: The Nordstrom Employee Handbook.
For many years, new employees to Nordstrom were greeted with a simple 5x8' card on their very first day on the job. Take a read:
I fell in love with this handbook the first time I read it. I know, it’s strange for a tech leader to be enamored with the teachings of a centenarian clothing company, right? Trust me for a minute, there is much to learn here. Allow me to unpack it:
- All great mission statements are comprised of a clear goal and timeline. With Nordstrom, the employee’s mission is crystal clear: outstanding customer service. It goes unsaid that the timeline is right now.
- The handbook tells employees to set their goals high not simply because they must but because they can achieve them. Without being grandiose, broey, or condescending this handbook implies that Nordstrom hires those who are amazing professionals and humans with high potential. By way of comparison, how many times have you heard a tech recruiter or leader bluntly say, “We’re a sports team,” in the last few years?
- You just can’t read, “there will be no additional rules PERIOD,” without feeling like you’ve got two middle fingers up to the man and Rage Against the Machine blaring through your speakers on full blast. Independence! No boundaries! Freedom! The idea that there are no rules but the ones we invent for ourselves is a cornerstone of the growth mindset. Yet this ultimate freedom is tempered by the heavy weight of responsibility and the critical need for your “best judgement.”
- The handbook even slyly asks employees to ignore hierarchy when needed, practically begging them to question the status quo. Every level of management is available and supportive at any time.
- Trust. In every sentence the message just beneath the surface is: “we trust our employees to do to the right thing for our company and customers.”
After reading this handbook, I shamelessly borrowed and modified it for use in my own teams. The cultural values expressed here both explicitly and implicitly resonated deeply with me. Freedom, responsibility, lack of boundaries, fearlessness, urgency, and mission-setting are all swirling around thick in those few sentences. There are many ways to run teams and I encourage you leaders to seek wisdom wherever you can. But for me, this is undoubtedly the best template for an employee handbook there is.
Now look, let’s reality check. No rules? Really?
I know lots of people who work at Nordstrom and I know that this handbook is no longer used. I know that it represents an idealized view of their culture. And I know it can’t truly be taken at face value without getting yourself fired. So what? If this isn’t real then admit it is a beautiful example of management art and let it inspire your leadership thinking.
Years after the class, with time and experience, I have grown to appreciate the thoughtfulness that tech companies like Reddit, Amazon, Netflix, Google, and others put into crafting culture and how it can drive behaviors, good and bad. I’ve seen time and again that the biggest predictor of a successful organization is how well it invests in company culture. Not only that, truly amazing organizations influence the culture outside their walls by giving back to community and society. Yes this sounds lofty, but I firmly believe that the highest calling of any organizational leader is in purposefully shaping culture to create an environment in which people and teams can be their best.
So, current and future leaders, what’s on your team’s 5x8' card?