Nowadays, many companies keep their handbooks to a minimum because they fear that employees won't read documents that are too long.
And they are right, to a certain extent. When facing novel-sized handbooks, new hires can feel overwhelmed and skip the parts that seem lengthy or too couched in legalese.
Although it is not advisable to include every tiny detail you can think of in your employee handbook, some policies are a must if you want to protect your business and set expectations for your employees.
In this article, we gathered the six most relevant policies that will provide you and your recruits with a practical roadmap for your day-to-day operations.
At-Will Employment Policy
When creating an employee handbook, it is good to start with the part that regulates the conditions under which the employee has been hired.
And an at-will employment policy unquestionably falls into this category.
Sometimes new hires are surprised after reading the employee handbook that they have been hired at will.
This means that the employer has a legal right to dismiss the employee for any reason at any time as long as the reason is not illegal (for example, discrimination on the basis of race, religion, age, or sexuality).
In other words, just as employees can resign whenever they want, employers also have the right to terminate their employment without reason, notice, or warning.
However, maybe this has not been communicated by the HR department clearly, or the candidate misheard it during the often excruciating hiring process.
Either way, to ensure that your new employees are crystal clear that they are employed at will, and to protect your business from potential lawsuits, it is essential that you make this information available to them from the start.
In theory, this kind of employment offers freedom and flexibility to the employer and the employee alike. Both parties can quickly terminate the employment in accordance with their needs and preferences.
But in practice, firing people is a very sensitive matter that can cause a lot of friction. So it is crucial to have a clear policy in place to avoid misunderstandings and litigation down the road.
A good practice to follow is to put it in your employee handbook in the form of a disclaimer that states that the employment is at will.
Disclaimers are usually short and consist of two or three paragraphs, but this will be enough to give you basic legal protection in case an employee files a lawsuit for termination.
However, when creating your at-will disclaimer, it is vital to keep in mind the laws and regulations of the states in which your company operates.
For instance, although employers can adopt some form of an at-will employment policy in all states, some have restrictions.
Montana, for example, only allows at-will employment during the first six months of the probation period. So if you have offices or employees in Montana, be sure to consider this when hiring people and creating your policies.
Also, many states have specific regulations regarding public policy, implied contract, and an implied covenant of good faith.
In cases when an employee is, for example, performing jury duty or refuses to do something that would violate the law, each state prescribes its own laws and regulations regarding termination of employment.
So even if you have advanced legal knowledge, when it comes to sensitive subjects like at-will disclaimers, a good attorney that will go through your documents can indeed be your best friend.
Conditions of Service Policy
After you set the at-will employment policy, creating the other sections of the employee onboarding handbook may seem like a breeze.
Especially when it comes to service policy that regulates work hours, leave of various types, and, of course, vacations, which is always everyone’s favorite topic.
New employees usually have many questions about this side of their new job, so it’s a good idea to explain those issues in detail and incorporate them in the employee handbook.
But before we dive deeper into this topic, let’s see the conditions that employee handbooks usually cover.
Regarding these conditions, it is advisable to outline whatever you think will be helpful for the new recruits and help them avoid any confusion.
Information like how to check in or out, or when the lunch break is may seem irrelevant, even funny to someone who has been in the company for years.
But if you put yourself in the shoes of a newbie who has just set foot in the office for the first time, information like this can seem like gold dust and relieve them of a lot of stress and anxiety.
This is especially true when it comes to leave policy. Unfortunately, many companies regard it only as a description of how many vacation days employees are entitled to and which national holiday will be celebrated every year.
But businesses should take it more seriously–new recruits care so much about the company’s leave policy that they consider it a deciding factor when choosing whether to stay with the company or not.
In fact, in a study done by HBR, 80% of respondents said that more vacation time was the most desirable benefit a potential employer could offer them.
To demonstrate it even further, let’s look at a good example from Pronto Marketing.
As you can see from the picture above, Pronto Marketing leaves nothing to chance when it comes to their leave policy.
The company has provided their employees a clear picture of the leaves they are entitled to and presented the key information in a visually clean and easy-to-understand way.
By including guidelines on how to request a leave and who to contact, they have also established easy procedures everyone can follow in their everyday work.
In short, the company has given their employees assurance that they will have enough time to take care of themselves in case of sickness, pregnancy, difficult life events, or if they just want to go on vacation.
New and existing employees feel very passionate about this, so the importance of a good leave policy in employee handbooks cannot be stressed enough.
After everything that has been said in this section, if you want smooth sailing at your workplace, and aim to avoid back-and-forth between your employees and the HR department, creating a clear service policy is a must.
Code of Conduct Policy
Another staple of every good employee handbook is the code of conduct.
It is always advisable to give your company as much structure as possible. And by defining the regulations concerning ethical conduct and appropriate behavior, you will make the workplace safe and comfortable for everyone and ensure that your business runs smoothly without major problems.
Additionally, your new hires can only benefit from becoming familiar with your code of conduct. They will know what is acceptable behavior early on and align themselves with the company’s ethical standards.
If you are not sure what exactly a code of conduct policy refers to, here are a few examples that can usually be found in the onboarding handbooks:
- Dress code
- Absenteeism and tardiness
- Equal opportunity policy
- Coercion, discrimination, and harassment
- Company property and confidential information
- Conflict of interest, bribery, and favoritism
- Substance abuse
The items on this list may seem like no-brainers at first glance, but don’t be so sure that employees, especially new ones, will always know what’s appropriate.
For example, research shows that almost half of employees aren’t completely sure what constitutes work-appropriate attire.
Furthemore, some of the topics like dress codes or tardiness are more lightweight in nature, while others, such as harassment and discrimination, are inherently more serious.
Because of the sensitivity of these issues, and the adverse effect they can have on the business and its reputation, it is advisable that you also prescribe disciplinary actions in case of violations.
When everyone is crystal clear of the consequences of undesirable behavior, knowing there will be disciplinary measures thwarts this kind of conduct.
For instance, Slack is an example of a company with a deep understanding of how outlining a code of conduct and reprimands can significantly impact creating a productive and healthy workplace.
In their Code of Conduct manual, they focus on important issues of today’s workplace culture, such as diversity, non-discrimination, intellectual property, the use of company assets, and so on.
But they also go to great lengths to explain that performance issues and rule violations will result in disciplinary measures. They also make sure to notify their employees where to turn for help if they face a situation like that.
In fact, the last section of the manual is dedicated solely to the procedures employees should follow to report workplace violations, resolve conflicts and answer other conduct-related questions.
As you can see from Slack’s example, a good code of conduct policy can help your company in a variety of ways: it can make employees feel safe and protected, inform newbies about acceptable behavior in the workplace, and protect your business legally.
Benefits and Compensation Policy
It is quite common for the new employees not to remember the compensation perks you talked about during the job interview.
An excellent way to remind them of what they are entitled to is to create a benefits and compensation policy and include it in your employee onboarding manual.
By putting it front and center, you make sure your new recruits can also get acquainted with other practical perks that they can benefit from the beginning, such as a free lunch or gym membership.
With that being said, let's look at five aspects every good compensation policy should encompass:
- Medical, dental, and life insurance
- Worker's compensation
- Overtime compensation
- Bonuses (one-time or annual)
As you can see from above, this section is a great opportunity to introduce your employees to the company's health plan, and explain the regulations concerning overtime work, bonuses, and your other financial compensations.
A good rule of thumb is to be honest and transparent, and state only the benefits you can actually follow through on because this is the section your employees will definitely read.
Another good reason to give this section special attention is that it can significantly improve the motivation of the employees.
Nothing inspires people to work harder like bonuses and rewards you offer to the top performers.
By giving them a chance to prosper financially, you make them more likely to make strides towards meeting their personal and company goals.
Also, a good compensation and benefits plan can leave a mark on overall company culture–it can increase the loyalty of the employees and reduce turnover. They will more likely recommend the company as a good place to work.
To illustrate the importance of a good compensation policy even further, let's look at Zoom. The company is recognized as one of the best places to work year after year, and it rates at the top when it comes to employee satisfaction.
If you look at the list of benefits they offer, it is no wonder people like to work there.
Competitive salary, bonuses, unlimited time off, free meals, fitness reimbursement, and monthly parties are just some of the perks the organization uses to attract stellar employees and keep them in the company.
Paying attention to workplace happiness through great benefits and compensation plans proved to be a winning formula for Zoom. It made the company a desirable employer everyone wants to work for.
In light of all these insights, it’s clear that good benefits and compensation policy can make a significant difference in the employees’ engagement and happiness.
Therefore, it deserves a special place in your employee onboarding handbook.
Health and Safety Policy
Some of the most important regulations you should include in your onboarding handbook are the ones concerning the employees' health, safety, and well-being.
Suppose you build a work environment where the safety and health of your staff are guaranteed and regulated, where it is easy to follow procedures regarding an injury at work, and where clear regulations prescribe how to handle equipment safely.
In that case, your employees will feel secure and protected.
For that reason, but also for the sake of your company's reputation, it would be advisable to devote a significant portion of your employee onboarding handbook to health and safety policy.
Three main topics companies usually cover in their handbooks are:
- Statement of intent
- Responsibility for health and safety
- Arrangements for health and safety
As you can see from the list, in this section, you should outline who does what, when and how relating to health and safety issues.
Employees should be clear about how the company plans to manage health and safety risks, who are the people responsible (their names, roles, and position) for handling them, and what procedures everyone should follow in case these risks occur.
By giving employees precise regulations on how to act in dangerous situations, they can approach the matter with a clear head and direction, knowing there is a procedure they can follow.
However, as we experienced in the last couple of years, no health and safety policy is set in stone.
For instance, In the wake of the COVID-19 pandemic, many companies had to quickly set protocols on how to keep their employees protected.
As a result, they had to include an addendum to the employee handbooks that let everyone know which new regulations to abide by.
That is a great example of how companies should momentarily react to the emerging conditions, but it can be hard to sync the employee handbooks with the new regulations in practice.
Every time a company changes parts of its policy, those changes should be reflected in the employee handbook.
And if you are stuck with a hardcover printed version or opted for a video version of your handbook, that could be hard to manage.
To ensure that the information in your handbook is always up to date, it’s a good idea to use quality knowledge base software like Archbee to create it.
With Archbee, your employee handbook will always be available online and easily accessible for editing.
As you can update it anytime from any place, making changes in your employee handbook will become easier and less time-consuming.
Remember, protecting the well-being and safety of your employee should be your number one priority. That’s why devoting your time and energy to this section can save your employees and your business in the long run.
Termination Policy
When employers hire new people, they have high hopes for the new employees, but things don’t always work out as they should.
Your company may face difficulties and have to let people go because of downsizing or closing a business. Or it will have to fire an employee because of performance issues or code of conduct violations.
Whatever the reason may be, the fact is that terminations can cause a lot of friction and even lead to lawsuits down the line.
That’s why it’s so important to develop a foolproof termination policy and include it in your employee handbook because it offers transparency regarding the grounds and procedures for termination.
By giving employees clarity about what they can expect before, during, and after the termination process, their exit from the company can be less traumatic for both the employee and the employer.
With that being said, let's look at the fundamental aspects of every official termination policy:
- Explanation of terminations
- The process for termination
- Offboarding procedures
- Severance pay
When creating your termination policy, it is good to keep these four aspects in mind and describe different types of termination, the steps in the termination process, disciplinary actions, exit procedures, and severance support.
Many companies focus less on the offboarding process, but that can actually backfire–the way employees are treated on their exit can affect the existing employees’ morale.
If employees are just shown the door unceremoniously, it could cause a lot of resentment among the remaining staff and reduce their satisfaction and productivity.
However, they will be more understanding if you document the grounds for the termination, provide the employees with the opportunities to improve, and treat them with dignity and respect on their way out.
Even with a termination policy in place, it is not easy to fire an employee, and it has become even more difficult during the pandemic.
That is why many companies offered extensive severance plans to the employees they terminated.
One of the companies that went above and beyond in supporting leaving employees is Airbnb.
Airbnb had to let go approximately 25% of its employees during the pandemic, offering them a particularly generous severance package that included 14 weeks of base pay, 12 months of health insurance, and a company laptop.
That allowed them to make a clean break, support their laid-off employees during the hard times, and build a reputation of a company that values its employees.
So if you have a severance package in place, even though it is not as extensive as in the example above, you should outline all of the key information in the termination policy.
A termination can be difficult for both parties, so it is best to be clear and transparent about the way it plays out from the start. Remember, a well-written termination policy can go a long way when it comes to protecting your business and reputation, so it is worth the effort to create one.
Conclusion
By covering six policies that every effective handbook must have, we wanted to show you that the employee handbook is not some tedious document that is sitting hidden away on some dusty shelf.
It is a dynamic playbook that explains vital company rules and regulations, legally protects your business, and sets expectations for employees’ behavior.
Each of these six policies will show you how to set the rules of the play and structure your business so that you have an efficient, productive, and safe workforce and workplace.
