The quick and simple answer to this often repeated question is a resounding, “YES!” Despite my strong feelings and the even stronger legal precedence in support of having an employee handbook, I find in my journeys that most small business entrepreneurs don’t think now is the right time for one. The most common reason for this delay is, “I’m only a small company with a handful of employees so I’ll have one once I grow.” On the surface, this makes sense. After all, as any small business owner knows, growing the business is a full time job. You have to market, sell, account for and prepare your product and/or service and you are only one person! However, it is much easier to install policies while your group is smaller. Also, a strong employee handbook is more than a set of policies; it’s a mission of culture and a model for the behavior that you want in place in all your dealings.
Once you’ve decided to create an employee handbook, you have many things to consider. Be sure that you have help from somebody who has experience authoring handbooks, particularly for your locality and industry if possible. There are many policy areas that should be addressed in your handbook but for now I want to bring attention to four main policy areas that every handbook should cover.

1. Code of Conduct- This is a statement of values and ethics for your company. It’s a list of behaviors that you expect out of your staff such as ethical accounting, equal opportunity, fair treatment and the avoidance of illegal activities. Without a clear, written code of conduct, it’s much harder to discipline your folks for their actions since you never communicated your expectations.

2. Disciplinary Action- Basically, this section communicates to your employees how your firm handles discipline issues. There are two main schools of thoughts. One approach suggests a detailed policy that specifies exactly what will take place and when it will occur. While I agree with the idea of being specific in your communication, I believe this section should not be too specific. In the course of daily business, some managers within your firm may not follow the policy perfectly so if the policy is too specific, an employee who is treated differently may feel discriminated against and take action. The key is to establish a culture of systematic progressive discipline without creating specific timelines or actions that may or may not be followed.

3. Employment At Will- All employee handbooks MUST, MUST, MUST address this crucial element of employment. One critical employment law issue affecting employee handbooks and policy manuals is referred to as employment at will. Employment at will is traditional common law perspective that an employee may seek work and quit at any time, and likewise, that the employer may hire and fire at any time for any reason or no reason. The handbook must be written in a way that reinforces at will employment without creating an implied contract. Keep in mind that jurisdictions have imposed differing limits on employment at will so be sure that your HR advisor is familiar with your local laws.

4. Anti-harassment- You, as an employer, should review and revise your anti-harassment policy so that it reflects the issues in the regulation and the recent court decisions. When reviewing the firms harassment policy, take care to ensure that it includes elements prohibiting sexual or other forms of harassment relating to supervisors and management, co-workers, visitors, vendors or customers, as well as same-sex harassment. In many jurisdictions, state or local law now includes prohibitions against harassment stemming from sexual preference or orientation issues. It is important to define a policy strictly prohibiting harassment and provide training for supervisors and employees alike. The policy should advise employees where or how a complaint may be made within the company. The presence of a well written anti-harassment policy will prove valuable if you find yourself involved in a harassment case or EEOC hearing.
I have barely scratched the surface of the complexities involved in creating an employee handbook for your organization. If you would like further assistance with your policy development, I can be reached at (484) 932-8687 or at jeff@myhrcheckup.com.

Jeff Llewellyn is the President of The Llewellyn Consulting Company (http://www.llewellyncompany.com), a full service Human Resources consulting firm that delivers personalized employment solutions for small and medium size businesses.