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Managing employees in a small business can be a double-edged sword. As a small company you want to maintain a friendly, casual atmosphere; yet, at the same time, you must set a standard of professionalism. Employee relationships in small companies can often reflect a family-type culture, but what do you do when a member of the family doesn't live up to his/her end of the bargain? It is important to clarify, up-front, the level of professionalism you expect in your company and to set some ground rules about employee performance and unacceptable workplace practices. An employee handbook will help you to communicate and consistently apply those rules and procedures you establish.

An employee handbook can also be used as a retention and employee satisfaction tool. Employees want clear and accessible information about their benefits and rights. They want to know what's expected of them, and they want to feel assured that they will be treated fairly and equally to other employees. A well-written handbook will help employees feel more comfortable with abiding by the rules and can help create a sense of community and mutual understanding.

An employee handbook should accomplish the following:

-Answer questions that a new employee wants to know.
-Communicate company expectations for employee behavior and summarize work rules and discipline procedures.
-Assist managers with consistently and uniformly applying policies and procedures.
-Educate employees about your company philosophy, provide information about the workplace, and outline your company's responsibilities to its employees.
-Provide information on the legal rights and obligations of employees as well as protect the legal interests of your company.

A handbook must be:

Accurate. What an employer does in practice is as important as what is written in the policy manual. Managers and supervisors must be fully aware of company policies so that their actions and words are consistent with the manual. Also, when you are creating policies, it is important to make sure that the policies do not contradict what is common practice by your managers and supervisors. If a new policy is meant to change or alter what is common practice, make sure managers are adequately trained in enforcing the new procedure and employees are given adequate notice of the change in policy.

Consistent. Often, employee handbooks are pieced together from a variety of sources: existing company policies, procedures from outside vendors (benefit administrators, payroll companies), "borrowed" policies from other companies, reference books and software programs, etc. Once the manual is complete, be sure that it is checked for consistency among topics and policies. It is important that the individual policies and procedures do not contradict each other, or cause confusion. For example, your discipline procedure as outlined in your discipline policy should be consistent with the discipline procedure discussed in the sexual harassment section. Also, use consistent terminology, e.g. references to gender, organization, departments, divisions and positions.

Timely. Creating an employee handbook is a continual project. As your company grows and the workforce becomes larger and more diverse, new issues will come up and new policies must be developed to address them. Changes in such areas as employee benefits, work rules and performance evaluation procedures may require updates to the handbook. Additionally, case law, statutes, and regulations continually change and may require revisions as well.

An employee manual should:

-Be written in a clear, non-technical style. It should read well and not include excessive legalese. The style and content should be reflective of the culture and values of the company.

-Be read and understood by all management and employees. Employees should sign an acknowledgement of receipt. Also, employers should provide an orientation, which explains, clarifies and answers any questions about the provisions in the handbook.

-Plainly state employer rules, regulations and procedures while incorporating state and local legal requirements.

-Be user-friendly and informative-a quick and easy resource to look up rules and guidelines.

-Provide an appropriate balance of information. Do not overload employees with too much information, but at the same time include enough detail that expectations and procedures are clear. Include only those policies which employees need to know for understanding working conditions, compensation, benefits, and their rights and responsibilities.

-Use language that provides flexibility and discretion, such as, "An employee's request for vacation will normally be granted, subject to the needs of our business."

-Be reviewed by an attorney to reduce liability risks and to ensure accurate information is presented regarding employment laws.

An employee manual should not:

-Use terms or statements which might imply a contract. Include a disclaimer that states that the handbook is not an employee contract. Do not make statements which imply a long-term or indefinite commitment, such as, "you will have your job as long as you perform your duties in an acceptable manner". Use the term "regular employees" rather than "permanent employees." Use the terms "hourly, weekly or monthly pay" rather than "annual salary." Use the term "training period" rather than "probationary period."

-Make promises that may be difficult to keep, such as that employees will receive a performance review each April.

-Be a list of rules. Handbooks should be written to include both the responsibilities and rights of the employer as well as the employee.

Here is a list of possible topics:
-Introduction/Welcome Letter
-Statement About Company History
-Equal Employment Opportunity
-Sexual Harassment
-Classifications of Employment
-Work Hours & Overtime Pay
-Pay Procedures
-Performance Reviews
-Vacations & Holidays
-Paid & Unpaid Leave (Bereavement,
-Jury Duty, Medical, Personal, Military, FMLA, etc.)
-Summary of Benefits (Health Insurance, Retirement Plans, etc.)
-Grievance Procedure
-Dress Code
-Code of Conduct
-Drug-Free Workplace/Medical Exams
-Smoking Policy
-Absenteeism and Tardiness
-Confidentiality of Information
-Discipline and Termination of Employment
-Safety and Health
-E-mail/Internet Policy